How do I get out of debt and get my writing back on track?

March 2, 2008 1:27 PM

I just moved 4,000 miles to Washington, DC and took a job with far less salary than I am worth in a new industry for the fringe benefits. I have about $18,000 in CC debt and have a modicum of a plan but need real financial help to sort out how to pay off this debt while in the meantime making something in the mid-30's.

Obviously, I should be doing a lot more than working my regular 9-5. I am an accomplished journalist, but I have literally never had to freelance. Now, I am sort of between things and realize I have nothing in the way of a signpost that advertises my work - and no portfolio to speak of. How does a person build a portfolio again from squat?

Is it worth it to start a blog and see what I come up with money wise?

Where do I get financial help? I'm not swimming in debt, but I have dreams where I watch my life sliding out from under me and I am tired of living a life I don't really have on income that's not really that. All of my purchases have been really lame, like eating out. I don't own a car or house or anything.

What financial responsibility resources are there for a young person with a job but nothing in the way of intermediate assets? (that won't come in the form of a book I've already gotten for Christmas, read, and still haven't figured out how to use.)

posted by anonymous to grab bag (5 comments total)

With $18,000 in credit card debt, you *are* swimming in debt, and you need to seek out a financial professional if your previous attempts to read books and such haven't resulted in you understanding the major budget changes you need to make in order to eliminate that debt and get back on your feet financially. Find someone who can make up a budget with you, allocate your resources better than what you're doing now, and make you stick to it. Frankly, it sounds like you're feet over head here. Starting a blog or freelancing or whathaveyou won't get you the kind of immediate cash infusion it sounds like you're looking for. The easiest way to make more money is actually to spend less of it.
posted by incessant at 1:47 PM on March 2, 2008

$18,000 is a lot to owe on a credit card. Do you have decent credit in general? See if you can get a personal loan from the bank if you do. Use that loan to pay off your credit card and don't run the card up again. You are still in debt but what you are doing is buying yourself a lower interest payment. You need to get in front of that 8-ball of debt. Look at what you are paying in interest each month and imagine what you could be doing with that money instead. You will see it really adds up over a year's time. Get a roommate, get a second job, do whatever it takes to get yourself out from under that debt load.
posted by 45moore45 at 1:48 PM on March 2, 2008

1) Budget
2) Budget
3) Budget
4) Stick to the budget
5) User Excel (or like) to create some kind of calculator to see how long it will take you to pay off your debt - MeFiMail me if you need a sample Excel file. I calculate at 20% annual interest, paying 400$ a month to the CCs, without putting any more cash on it will allow you to pay off your debt in 7 years. $500 a month: 4.5 years. $600 a month: 3.5 years.

6) Get a second job. Even 200-400$ a month extra can go a long way.

7) Get a low-rate credit card or as many above have said, get a bank loan with better rates. I calculate at 10% annual interest, paying 400$ a month to the CCs, without putting any more cash on the balance will allow you to pay off your debt in 4.5 years. $500 a month: 3.5 years. $600 a month: 3 years

8) Eat out less. Whenever possible, make your lunches, dinners, breakfasts.

9) Oh and this might seem counter-intuitive, but put aside some cash for your 401K or equivalent retirement fund. As much as it hurts, this will benefit you greatly in the long term.

10) Make all necessary cuts to your lifestyle that have no actual benefit - cable if you hardly watch TV, fancy phone options, cigarettes if you smoke'em, etc.

Good luck. You can do it!
posted by bitteroldman at 2:18 PM on March 2, 2008

Go to a consumer credit counseling firm such as CCCS. Make sure it's a non-profit outfit. It worked great for me.
posted by Doohickie at 2:34 PM on March 2, 2008

2nding CCCS. They saved me a few years ago. Also, get yourself a second job immediately. Freelancing would be great but with that much CC debt, I would see about something more steady. The blog idea is just not certain enough.

Also, get rid of all your unneccessary expenses: cable, expensive gym membership. Will you be living alone in D.C. ? If so, bad idea. Get one, even two roommates. You can easily make a dent into this debt by squirreling away $600 dollars extra a month.

Good luck.
posted by notjustfoxybrown at 3:31 PM on March 2, 2008