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33-Year-Old With More Debt Than Anyone Should Ever Have

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June 22, 2023

TLDR: The podcast discusses a woman's dire financial situation, characterized by excessive spending on gems in games, no savings, insane credit card debt, high student loan debt, and even debating getting a mortgage. She's urged to clean up her financial mess and bring in more income.

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  • Product Photographer's Financial Improvement and ConcernsA product photographer earns $3k/month after taxes, feels improved but recognizes need for savings, Roth IRA, debt management, and reducing non-essential spending.

    Candice Thomas, a product photographer from Temple, Texas, earns approximately $48,000 a year before taxes, or $3,000 a month after taxes. She feels her financial situation has improved from a year ago due to buying a house and implementing a strict budget. However, she acknowledges the need to learn more about savings, potentially setting up a Roth IRA, and managing debts. Her current checking account balance is low, with only $120 remaining after expenses, which she finds concerning. The majority of her expenses are on non-essential items, as indicated by the numerous 'x's in her spending chart. To improve her financial situation, she should focus on reducing non-essential spending, increasing savings, and managing debts effectively.

  • Out of Control Spending on Apple Subscriptions and Small PurchasesIndividual's excessive spending on non-essential items, despite tracking expenses, is leading to a paycheck-to-paycheck lifestyle and hindering debt repayment.

    Despite tracking all expenses, the individual's spending, particularly on Apple subscriptions and smaller purchases, has gotten out of control. They've found themselves financing many aspects of their life through various methods, leading to a significant portion of their income being spent each month. This excessive spending, including on games and food, has left them living paycheck to paycheck and struggling to make progress on debts. The individual acknowledges the need to address their habits and addictions to spending, but first, they must gain a better understanding of their financial situation by delving deeper into their expenses.

  • Struggling to Save for RetirementDespite efforts to save, the speaker's current financial habits are hindering their ability to save enough for retirement. They should focus on reducing non-essential spending and increasing retirement contributions.

    The speaker's current financial habits, including using a checking account for savings and spending a significant portion of income on non-essential items, are hindering their ability to save enough for retirement. The speaker has been trying to save by automatically depositing a portion of their paycheck into a separate checking account, but they have been using that money for everyday expenses instead of leaving it to accumulate. The speaker also admitted that their contributions to their retirement account have been significantly behind the recommended amount for their age. The speaker acknowledged the importance of financial transparency and hoped that sharing their situation would inspire others to take control of their own finances. One relatively positive aspect of the speaker's financial situation was the use of a 0% interest credit card for veterinary expenses for their pets. However, the speaker should be aware that the interest-free period will end soon, and they should have a plan to pay off the balance before then to avoid accruing debt.

  • Understanding Debt and Changing Spending HabitsRecognize your debt situation, create a budget, and seek help to change spending habits for financial stability.

    The discussion highlights the importance of understanding your debt situation, making a budget, and sticking to it. The interlocutors in the conversation had accumulated significant credit card debt and were making minimum payments, which resulted in high interest costs. They transferred balances between cards and continued to make new purchases, leading to a vicious cycle. The speaker recognized the need to change their spending habits and sought professional help through therapy. Although they had made progress, they were still struggling to control their expenses, particularly in areas like dining out and shopping. The conversation underscores the importance of being aware of your financial situation, setting realistic goals, and seeking assistance when needed.

  • Recognizing and Addressing Stress-Related Spending HabitsAcknowledging and addressing stress-related spending habits is crucial for financial stability, even if it feels uncomfortable. High-interest debt from multiple credit cards can accumulate quickly and prevent progress towards financial goals.

    When people are stressed, they often use spending as a coping mechanism, which can lead to a deeper financial hole. It's essential to bring up these habits with a therapist or trusted advisor, even if it feels uncomfortable. The speaker in this conversation was using multiple credit cards with high-interest rates and minimum payments, leading to a significant amount of lost money. They had transferred balances between cards to take advantage of promotional periods, but the interest still accrued. The speaker's educational background included a private bachelor's degree in photography. It's crucial to acknowledge and address these financial habits to prevent further debt and work towards financial stability.

  • Struggling with Student Loans and Large Monthly PaymentsDespite having a significant student loan debt, the speaker faces challenges in making progress due to high accruing interest and large monthly payments for their mortgage, car, and student loans.

    The speaker's student loan debt, totaling $73,177 with accrued interest, is growing rapidly due to the monthly payment of $171 being much less than the accruing interest. The loans are federal, and there's no forgiveness in sight. The speaker also has a mortgage and a car payment, making their monthly minimum payments a significant portion of their income. The speaker is considering upgrading their car, but the repairs on their current 2011 Dodge Avenger are currently worth it. The situation highlights the burden of high student loan debt and the struggle to make progress towards paying it off.

  • Reevaluate spending habits and prioritize debt repaymentFocus on minimum payments, necessities, and savings while eliminating non-essential expenses to pay off debts. Address potential behavioral issues and medical expenses, and create a strict budget to make progress.

    The person in this conversation needs to reevaluate their spending habits and prioritize paying off debts before indulging in non-essential expenses. They currently spend a significant portion of their income on minimum payments and discretionary purchases, leaving only a small amount for necessities and savings. The conversation also touched upon the importance of addressing potential underlying behavioral issues, such as compulsive spending or addiction, with a mental health professional. Additionally, the person needs to address their medical expenses and focus on improving their overall health for the sake of their finances and wellbeing. Creating a strict budget and eliminating unnecessary spending, particularly on mobile apps, is necessary to make significant progress in paying off debts.

  • Drastic Changes Needed for Debt RepaymentTo get out of $100,000 debt, find extra income sources and cut expenses, prioritizing debt repayment over other goals to avoid 16+ year repayment period

    The speaker's current financial situation requires drastic changes in order to get out of debt. With minimum monthly payments taking up a large portion of their income, they need to find ways to increase their earnings and decrease their expenses. This may involve working additional jobs, cutting back on non-essential expenses, and prioritizing debt repayment over other financial goals. The speaker's current debt load of $100,000 would take over 16 years to pay off with the current income and expenses, which is not a sustainable solution. The speaker needs to take immediate action to improve their financial situation and avoid falling deeper into debt.

  • Focus on eliminating minimum payments first for faster debt repaymentPaying off smaller debts first can lead to substantial savings and faster debt repayment, even if it means temporarily suffering financially.

    The best financial decision for someone with significant debt is to focus on eliminating minimum monthly payments first, even if it means suffering temporarily. This approach, though challenging, can lead to substantial savings and faster debt repayment. For instance, by bringing in an extra $1,500 a month, an individual could pay off smaller debts and reduce their overall monthly payments. This strategy, however, requires discipline and dedication. It's essential to remember that the goal is to reach a point where minimum monthly payments are a smaller portion of income. In the end, this approach can lead to financial freedom within a reasonable time frame.

  • Focus on emergency fund before retirement savingsTo secure financial stability, prioritize building an emergency fund before catching up on retirement savings, even if it means cutting back on expenses and living frugally.

    Having a large amount of debt, particularly from a mortgage and high-interest credit cards, can make it difficult to save for an emergency fund and retirement. The speaker recommends focusing on building an emergency fund first, which may require cutting back on expenses and living frugally for a period of time. After achieving a fully funded emergency fund, one can then focus on catching up on retirement savings. It's important to remember that the debt was accumulated through choices made in the past, and the only way out is to make sacrifices and stick to a strict budget. The speaker emphasizes the importance of being realistic and acknowledges that it may not be an easy or enjoyable process, but it's necessary to secure financial stability for the future.

  • Assessing financial progress and setting goalsFocus on increasing income and addressing root causes for financial improvement. Check out resources for tips and subscribe for updates.

    Despite making progress in some areas, such as not having an auto loan, there is still a long way to go financially. The individual's financial score is low, likely a 1 or 1.5 out of 10, and improving income is crucial for financial improvement. It's important to focus on increasing income and addressing the root causes of a poor financial situation. Don't forget to check out additional resources, such as my Instagram and Twitter, for more financial tips and insights. Subscribe for regular updates to stay informed and take steps towards a better financial future.

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