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I’m a Navy Veteran and Need Your Advice to Become Debt Free. – Amanda

26 y/o female, Navy enlisted four year veteran.
5500 dollars in personal credit card and loan debt.
1100 dollars worth of bills every month (636 towards car, insurance etc. monthly bills towards debt are 464).
1600 dollars a month income approximately 9 months out of the year from GI Bill.
Unemployed.
No savings.

I was with the US Navy as an active duty enlisted member for four years. I managed to save very little during this time because I was paying off previous student loans towards a degree which I didn’t complete.

Now, I am out and dedicated to my schooling 100% with the new GI Bill. I am unemployed, but the GI Bill pays me approximately 1600 dollars a month to go to school full time and maintain good grades.

However, I have approximately 5,500 dollars of credit card/ personal loan debt. I also have a car payment, but I have removed that from my overall personal debt calculation because it is a form of investment.

I make 1600 a month (when in school, so there are two to three months of the year I see no check), and I have 1100 dollars a month worth of payments to make for all of my bills. If I was debt free, it would only be about 600 a month. Being unemployed, with no active credit cards and no desire to accrue more debt, how can I pay this off quickly while stil being able to feed myself?

I have heard that there are free federal debt programs out there, but I’m worried about scams. I want to get out of this little debt quickly so I can start saving my money on a consistent basis again. Any ideas? I am already overpaying on two of the credit cards, and that’s with me rolling quarters for gas.

Amanda

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • James

    Hi Amanda

    Awesome job laying out all your finances. It sounds like you will be out of debt in no time if you can keep monitoring your finances.

    A couple words of advice are:
    - Track your own personal expenses — in addition to bills, you need to know how much you are spending on yourself each month. See how much you really need each month for each expense (food, gas, shopping, etc). When you start seeing the numbers, you are able to see where the heck all the money is really going. That way you wont have to roll quarters at the end of each month because of low funds.

    - Pay off the card with the highest APR first. By tacking the highest, you will get less interest tacked on each month than if you just paid both off in equal amounts. Also how good would it feel to pay off one of those cards? One less bill in the mail.

    - Part-time job? I know the seasonal hiring has ended, but maybe you can find a part-time job during those 3 months you are not in school. Get some extra cash coming in for yourself and to pay more of your debt off.

    - Sacrifice a latte for a savings account? Keep away from a small purchase, and put that in to a savings account. This can set you up a great emergency cash fund which will definitely come in handy, and will help you avoid using a credit card.

    Good luck!

    - James
    Financial Planning Student

  • James

    Hi Amanda

    Awesome job laying out all your finances. It sounds like you will be out of debt in no time if you can keep monitoring your finances.

    A couple words of advice are:
    - Track your own personal expenses — in addition to bills, you need to know how much you are spending on yourself each month. See how much you really need each month for each expense (food, gas, shopping, etc). When you start seeing the numbers, you are able to see where the heck all the money is really going. That way you wont have to roll quarters at the end of each month because of low funds.

    - Pay off the card with the highest APR first. By tacking the highest, you will get less interest tacked on each month than if you just paid both off in equal amounts. Also how good would it feel to pay off one of those cards? One less bill in the mail.

    - Part-time job? I know the seasonal hiring has ended, but maybe you can find a part-time job during those 3 months you are not in school. Get some extra cash coming in for yourself and to pay more of your debt off.

    - Sacrifice a latte for a savings account? Keep away from a small purchase, and put that in to a savings account. This can set you up a great emergency cash fund which will definitely come in handy, and will help you avoid using a credit card.

    Good luck!

    - James
    Financial Planning Student

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