A friend of mine does very well for herself, she makes $125k a year. Keep in mind that is double the MEDIAN US income per person. So, she makes more than double the average worker. She informed me Sunday that her spending on her credit card is unsustainable. One would think this is a good thing, a wake-up call of sorts. Negative ghost rider.
Her biggest issue is she tries way too hard to fit in, for someone in their mid-20s to mid-30s this is understandable. You are likely in an apartment, a small one and hanging out with colleagues after work, and the like. You may also be going on dates/parties etc. However, this behavior needs to be grown out of, it’s a sign of a maturity process. It hasn’t stopped in fact it got worse.
I do not care what part of the country you live in, a 6-figure income should be more than enough to sustain the life of a couple/family, let alone a single person. This is where budgeting, and expense management comes into play. In addition, knowing needs vs wants as well. This person has shown repeatedly they are not capable of doing this.
Interest rate on car loan? Yeah, it’s over 30%, that’s not a good rate, that’s a good loan shark rate. The credit card rate is likely about the same mind you. You wreck your credit in this country you will pay at every turn.
Student loan debt? Sure, just make a minimum payment like your other loans. This person is checking all the boxes.
Her biggest problem? It’s not her debts believe it or not, it’s her lifestyle. She refuses to be an adult, instead opting to a college fueled party life. For someone closer to 40 than 37 mind you.
As hard as this may be to fathom, it is not hard to correct this, but it’s not a diet she needs, it’s a lifestyle change.
First? Knock off the happy hour and late-night partying. You are an adult not a college kid anymore. Happy hour is famous for the “I’ll have a couple drinks, well better get an app, well another drink please….aw shucks I better order food…. maybe dessert too?” Next thing you know that cheap mixed drink turned into a bill of around $100. Instead of this being a one-time thing, you have made it into a daily thing with your friends.
Second? Learn to cook at home, you have cable shows, YouTube, and cookbooks. Cooking at home costs a fraction of going out. You can even grab a bottle of booze/liquor/wine for a fraction of going out. Don’t believe me, look it up for yourself.
Third? Pay your bills first. Every paycheck. After paying rent, pay your bills. Your credit score will thank you later. Do not save money, extinguish all debt as humanly possible.
Til next time
Johnny Does