treading just above waters of default...

[behindblueeyes]

Hi all. 

I will admit, in the past I was naive and just plain stupid when it came to spending and saving money. And now I'm paying for it. I could use any tips or help as I'm trying to stick to a plan to get my student loan debt and other debt under control....

To start, I live on my own. I pay $700 in rent which includes heat, hot water, sewage, trash. My electric bill is about $30 a month. No car payments. 

Car insurance= $45 a month

Cell phone= $65

Internet= $55

Renter's insurance = $11

I make between $850-1100 biweekly at work.

Now, my student loans. I have about $15,000 in federal and $25,000 private.

Right now my federal are in forbearance and good standing. My private loans are treading water and I'm behind on payments. I called and they said they could do interest only for a period of time if I pay off my late balance. But I get so frustrated thinking how I will ever pay off these things, or at least maintain good credit, even if I live to a minimum standard. I don't see my salary increasing greatly anytime soon. And I know about the income based repayment for federal loans, but with my salary that comes to about the same as the standard payment.

I also have about $800 in credit card debt for a laptop purchase (although that debt is interest free as long as I pay the balance by January).

And I have at least $1300 in medical bills from a hospital stay a few months back.

[SCF]

You state that you make at least $850 every two weeks, which is $1700/month.  Your expenses are $876, basically one of your paychecks.  Where is that other paycheck going?  Obviously, you didn't list expenses like food, gas, clothing, and household supplies, but do you know how much you spend on each of these things?  If you want to make a plan to pay down your debt, you have to start by knowing where your money goes.

Once you know where you are spending, you can decide what changes you are able to make to help you reach your goals - you can get your money to start working towards your plan rather than leaving your wallet with no particular direction.

[Anonymous]

Do whatever you have to do and get your private loans current.  After that, you have to increase your income.  Whether that means finding a higher paying job or getting a second job it's going to take you forever to be debt free at your current income.

[behindblueeyes]

Thank you for your responses. I was foolish with my money in the past, and instead of using what should have been my leftover money for my student loans and other bills, I spent what was leftover from food, gas, etc. on clothes and other things.

Now I ready to put that behind and work overtime every week with paying my bills on my mind.

I paid the past due balances of my private student loans today, so at least they're current. I do realize that I need to increase my income. Even though overtime right now is readily available and I'm bringing home a little over $1000 biweekly, I need to prepare for when there are weeks of no overtime. 

Another question: I have unvested stocks with the company I work for, and 5 shares vest next month and I can cash them out. Right now it looks like after taxes I would get close to $1000 which will be of some relief. I want to use it all for bills, but I'm not sure the best way. Some ways I've thought of are:

A. Pay off my credit card

B. Start paying off my medical bills

C. Apply it towards my private loans

I'm thinking A or C.... would C be a better option as my credit card bill is interest free for the rest of this year?

Thank you again for your help. 

[Anonymous]

I would make minimum payments on the CC and SL and pay off the medical bills.  Then I would start working on the student loan.  I would pay the CC just prior to the end of the interest free period.