24 y/o making 61k in Montreal, Qc

[namaste1959]

I just got a salary increase last month and am trying to better manage my finances. I'm paying 936$/month for rent (living with gf), 388$/month for car, 293$/month for insurance (car and home), 51$/month life insurance and got 7000$ in Cc debt an 5000$
in credit line debt. I also got some acting gigs as side hustles that brought me 9000$ last year but it’s not a sure thing. Any tips on how I should be managing my money to get rid of the debt faster? Or how to better budget? (Not a financial savvy and took on some debt when I was younger)

EDIT: Paying life insurance as I have a young kid already and it was suggested to me.

 

[reverie1]

@namaste1959 PAY YOUR DEBT = ~20-22% growth per year.

edit: interest of credit cards is yearly and not monthly

 

[namaste1959]

@reverie1 How much would you recommend? I clear 1626$ every two weeks after taxes and got around 1900$/month in bills/necessities. Thank you!

 

[reverie1]

@namaste1959 Honestly the max you can.

Make sure you have emergency savings too just in case something goes wrong with your job. Also, if you have any money sitting in TFSA or your savings. use it to pay-out your debts.

Good luck

 

[namaste1959]

@reverie1 Taking notes! Thank you!

 

[teach87]

@namaste1959 Dont eat takeout or delivery until your debt is paid off. Literally slam as much as you can in to it.

 

[namaste1959]

@teach87 Working on this! Thank you!

 

[truehealthbalance]

@teach87 Lol OP pay as much as you can, but feel free to get takeout, delivery, and go out with friends once in awhile. You’re in your mid-20s. You should enjoy this time within reason.

Try to maximize cooking at home when eating by yourself, and getting debt free should be a priority, but don’t make yourself miserable becoming obsessed with clearing it.

That said, if you took on the debt “when you were younger”, you absolutely should be looking at where your money is going day to day that has prevented you from paying this out already and cut where you can.

 

[teach87]

@truehealthbalance It's one of the easiest ways to save money. They could make serious dents in their debt by just eliminating takeout/delivery for 6 months. It's not a crazy sacrifice.

 

[truehealthbalance]

@teach87 For sure, but going out for drinks and spending $50-$100 here and there isn’t going to set OP back irreparably and he still gets to have fun and make memories with his friends. My mid-20s were some of the best times of my life because I was getting a pretty decent salary, still had youthful energy, and all my friends did too, and they were free to hangout and go out. I had the benefit of living at home so I was debt free after paying everything out with my first few months of pay cheques, but I would’ve hated to miss out on those memories just to get out from under a loan a month or so faster.

He absolutely should be intentionally paying down the debt whenever and wherever possible, I just don’t think doing so should get in the way of living his life as well.

If they cannot do so without setting themselves back more though, they shouldn’t.

 

[teach87]

@truehealthbalance I dont know O.P.s situation, but for all we know, he could eat out for lunch every day and possibly get dinner a couple of times per week. 50-100 once in a while, sure but also just buckling down for 6 months to a 1 year also isn't going to hurt him either.

 

[jim2323]

@truehealthbalance Pot luck with friends even more fun

 

[08lc02]

@namaste1959

Taking notes! Thank you!

Also, look into balance transfer (BT) offers from banks, that have 0 interest / 1 - 3% transfer rate, to clear your high interest debts.

You have a kid also, so it's not lost on us that this complicates things for you spending / saving wise.

 

[jessiengerman]

@reverie1 This is good advice. 20% debt needs to asap before savings. Only exception is RRSP contributions that are matched by employer as the rate of return is much higher than the debt.

 

[wisdomtracker]

@jessiengerman Hello, I have the same issue (same age) in Calgary. I’m late 3 years on my credit. What’s the point of paying it off? If my credit score is ruined anyways and its weight on credit history is decreasing every year.

 

[jessiengerman]

@wisdomtracker I'm not here to convince you to do anything. You do you.

 

[eternalshadowx]

@namaste1959 Credit cards aren’t for holding debt on them, they’re for the convenience of use. Pay it down to zero every month. That much debt and interest can financially ruin you over time

 

[omowunmi]

@namaste1959 $1626*26/12 - $1900 = $1623 per month to pay off debt. Pay off the credit card completely first.

 

[cheeky81]

@reverie1 Credit card interest rates are per year.

 

[3rdegreeblock]

@namaste1959 Your life insurance is high - is it a permanent one? You might want to check if you have one also with your work insurance (1X or 2X your salary). Typically it’s cheaper.

Pay off your highest interest debt first, which is probably your cc. If you can transfer some of it to your LOC you’ll save on interest.

Honestly 61K at 24 in MTL is a decent salary. Budget your expenses better and you should theoretically be able to get rid of your debt in less than 2 years.