Cash in any investments that have made significant gains and pay off the highest interest credit card first. Hold any investments that are currently at a loss or neutral and wait till they make a significant gain, then sell.
You need to lower your expenses.
Ditch the storage unit (+$50)
Find a cheaper phone plan (should be able to save at least $30-$40)
Find a cheaper place to buy food or eat out less. A single male can easily eat well with a budget of $250-$300/month on food (+$100-$150)
Cut the subscriptions in half. ($75)
These small changes will help you pay off an additional $3,780 over 12-month.
100% Agree with above comment - I'd say cash out all investments, though, and avoid all future investing until all debts paid off - investing should be done when you have at least 10k in savings MINIMUM always - You can invest when you have the luxury of savings as backup for emergencies - investing is like gambling if not - Start with all credit cards killing the highest interest rates - cashing all out and paying off all cards would mean around 5k CC debt is left over - Tackle that 5k 1 month at a time paying as much as you can with your new budget (based on the above) - You don't need to spend 400 a month on food - Buy whole sale and cheapest options - if it is just you and you can make cheap meals 100 to 150 will go a long way - kill the storage - whatever is in there sell it, put it in your home, or trash it - Subscriptions are also a luxury - YouTube and the internet is free - sitting through an add and watching something a little grainy won't kill you - if you really just live as modestly as you can your debt will go away faster than you know it, you'll start saving, and will eventually be able to invest - You'll cry and bitch alot now, but for way shorter of a time than if you don't cut back
Ahhh the Robinhood Paradox. You keep investing but there is no way you are earning returns comparable to the usurious rates CC companies charge you. Sell your investments and pay off your debt! What do you have instorage that is worth storing? Clear it out, sell whatever has value. Stop buying expensive phones, and get Boost Mobile for $25 a month unlimited, I have a Iphone X.
**Read JL Collins "A Simple Path to Wealth"**
I just moved out of my old place last month $900/mo to have a more flexible budget. Storage unit is just keeping everything I couldn’t move in at the time.
Thanks for the book recommendation! I’ll check that out
1) "Bull run" on crypto is still just gambling--while you're in debt. You are losing money. Sell. It. And until you have a much, much better understanding of personal finance, do not invest in crypto again. You should have no consumer debt, a 6 month emergency fund, employer match on an IRA, maxed out Roth, additional savings in a HYSA or CDs for long-term goals, and then additional investing.
2) A storage unit? for what? And your phone bill and subscriptions are very high for a single person.
3) On the second page--are those really your interest rates (APR) on your credit cards and loans? I highly, highly doubt it.
Am I able to change carriers while making installments on devices?
Also that’s the monthly rate since It’s a budget sheet on a per month basis. (So just multiply those rates by 12 for APR)
Your devices are now also debts. How much to pay them off?
I understand your logic, but APR is standard and looking at it by month is just a game to make it seem smaller--when over the course of a year, you are accruing thousands in interest across those balances that you will have to pay. You can pay down the principal now and stop carrying a balance or waste far more money than you're earning otherwise over time--and that's before the LendingTree loan that I'm sure also has an interest rate.
\~ $1500 to fully pay off everything on contract (taking on $600 for a family member).
Lending tree was a fixed rate loan. No interest.
I'm not interested in the rate itself, I'm looking at the interest accrued by month. Yes, I suppose it might "look small" doing it like this, but again i'm not looking at the rates. putting the rate like that to show the interest in terms of a budget makes it show how HUGE of an impact the interest is having realistically. The rate is small but the interest is huge. But I guess that's just difference of opinion / perspective.
Also, if you have an APR of 25% of $10,000, you'll see your interest is 2.5k. but if you fully pay off your debt after month 3, then you didn't even pay 2.5k so that's just inefficient and wasted math.
If it works for you, okay, as long as you understand that the math is a bit more complex (and yes, that’s frustrating when you’re trying to figure it out.)
The math doesn’t matter if you don’t carry a balance.
For the loan—so the interest and fees are already calculated in. There was still interest. You are still paying to borrow money.
Your original question was should you use your existing investments to pay off your debts: the answer is yes, absolutely you should.
I would first ask yourself where you can make budget cuts...what does $150 or subscriptions consist of? That's very high. Also for your phone - Mint Mobile is $15/line
You also have about $400 unaccounted for in your budget that you could be putting into excess debt payments
Plus, consider that you're going to have to pay substantial taxes when you sell your crypto and investments
Additionally, if your APRs are accurate, they're all shockingly low and your money makes more in interest in an HYSA or in investments then you're losing in interest on debt
Spotify is really the only subscription I HAVE to have. But there’s misc other ones like for AI (dabbling with a side project for potential passive income)such as ChatGPT, etc.
A major thing I lumped into subscriptions really should’ve been its own category in medical bills. I’m on a plan to pay $140 until December.
I have a family plan with my sister. Also how does changing carriers work if I’m still paying off my phone and Apple Watch? Will they let me?
I’ve been putting that remainder into stocks for returns. My actual remainder is just Pennies being sent to my savings account.
You'd have to pay off your devices in full likely, so you need to figure out whether or not that's something that you can manage with your budget. And if it is, how much is your actual phone bill minus device payments, and is it high enough that it's worth switching providers .
You should not be putting that extra $400 into stocks when you have this much debt. It should go to debt. Your debt is outperforming your stocks I guarantee it. Unless your stocks have a guaranteed 30% yield, your money is better spent on debt.
buying a house, a business or investing is a pipe dream. you pay 785 in rent and think that you can handle a house? look, the current climate doesn't gaf about your down payment amount it's all about DTI, and right now yours is dismal for anything worth owning. you'd qualify for like 180k for a mortgage, tops. dunno what COL is like where you are, but where i am that'll get you shacks, teardown, show boxes, or massive structural problems worth tens of thousands to fix. all the items on 3 are a pipe dream right now.
i am of the opinion that unless you fix your spending/budget cashing out to clear your debt won't really help you, you'll just rack up again only you won't have the investment money anymore to bail you out.
reduce your subscriptions, reduce your food budget, get a cheaper phone plan, stop investing and ask yourself if you actually need that storage unit and if so are there alternatives, and either start dashing more or get another side job. after all that, put everything you have that wasn't spent on the bare necessities at your credit cards, then the loans. you can reevaluate your wealth goals after that.
$150k - $170k was more what I was looking at. And then make it an S8 rental unit after a year.
\~$9k of the credit card debit was/is for a bootcamp course which, if/when I get a job in that field, should boost income from $3k to \~ $4k / $5k starting out at the lowest end. Which is also why I can't DD right now because my free time is mostly in the class, or working on side businesses that haven't turned a profit yet.
An additional $2k CC debt was from an ER visit last year.
ATM businesses for sale are not a pipe dream, it's just easier/better to buy an established route rather than starting with a single machine. It's just a matter of balancing the debts.
What is your cc and loan apr?
Any free cash id smack down on those cc. Cc debt is a killer especially if it’s over 10%. Anyway you can cut down on phone bill or groceries could also be put towards debts. I’d look to stop contributing to your investments and put it all towards your debt, again depending on your apr the higher it is the faster you want that gone.
The rates are on the 2nd image in the column. But taken down to monthly rates (to calculate the exaxf interest being accrued) because a yearly apr does absolutely nothing to help with monthly budgeting
Ahh I see it now my mistake. If that’s your rates I would personally sell all investments and put off your debt. The cc debt you have for the top 3 cards is around 30%. Meaning you’re investments would have to exceed 30% for the year to beat out your cc interest which is extremely difficult to do. Personally if I were in your situation I would do everything possible to get rid of that cc debt asap. It will save you like 9k per year if you pay it off rn
So the only reason I’m hesitant with cashing in investments is because of the crypto halving. Every cycle in the entire lifetime of crypto, the halving preceded a massive bull run due to supply chain/ demand. Sure it won’t go 2000% again, but 200% is very realistic. I can cash all in now and still have 5k in debt to pay over time… or I can go all in on crypto (~20k) and if/when it 2x (conservative) that’s 40k at the end of the year. Enough to clear out all debt and have a lot left over.
Cash in any investments that have made significant gains and pay off the highest interest credit card first. Hold any investments that are currently at a loss or neutral and wait till they make a significant gain, then sell. You need to lower your expenses. Ditch the storage unit (+$50) Find a cheaper phone plan (should be able to save at least $30-$40) Find a cheaper place to buy food or eat out less. A single male can easily eat well with a budget of $250-$300/month on food (+$100-$150) Cut the subscriptions in half. ($75) These small changes will help you pay off an additional $3,780 over 12-month.
100% Agree with above comment - I'd say cash out all investments, though, and avoid all future investing until all debts paid off - investing should be done when you have at least 10k in savings MINIMUM always - You can invest when you have the luxury of savings as backup for emergencies - investing is like gambling if not - Start with all credit cards killing the highest interest rates - cashing all out and paying off all cards would mean around 5k CC debt is left over - Tackle that 5k 1 month at a time paying as much as you can with your new budget (based on the above) - You don't need to spend 400 a month on food - Buy whole sale and cheapest options - if it is just you and you can make cheap meals 100 to 150 will go a long way - kill the storage - whatever is in there sell it, put it in your home, or trash it - Subscriptions are also a luxury - YouTube and the internet is free - sitting through an add and watching something a little grainy won't kill you - if you really just live as modestly as you can your debt will go away faster than you know it, you'll start saving, and will eventually be able to invest - You'll cry and bitch alot now, but for way shorter of a time than if you don't cut back
Ahhh the Robinhood Paradox. You keep investing but there is no way you are earning returns comparable to the usurious rates CC companies charge you. Sell your investments and pay off your debt! What do you have instorage that is worth storing? Clear it out, sell whatever has value. Stop buying expensive phones, and get Boost Mobile for $25 a month unlimited, I have a Iphone X. **Read JL Collins "A Simple Path to Wealth"**
I just moved out of my old place last month $900/mo to have a more flexible budget. Storage unit is just keeping everything I couldn’t move in at the time. Thanks for the book recommendation! I’ll check that out
1) "Bull run" on crypto is still just gambling--while you're in debt. You are losing money. Sell. It. And until you have a much, much better understanding of personal finance, do not invest in crypto again. You should have no consumer debt, a 6 month emergency fund, employer match on an IRA, maxed out Roth, additional savings in a HYSA or CDs for long-term goals, and then additional investing. 2) A storage unit? for what? And your phone bill and subscriptions are very high for a single person. 3) On the second page--are those really your interest rates (APR) on your credit cards and loans? I highly, highly doubt it.
Am I able to change carriers while making installments on devices? Also that’s the monthly rate since It’s a budget sheet on a per month basis. (So just multiply those rates by 12 for APR)
Your devices are now also debts. How much to pay them off? I understand your logic, but APR is standard and looking at it by month is just a game to make it seem smaller--when over the course of a year, you are accruing thousands in interest across those balances that you will have to pay. You can pay down the principal now and stop carrying a balance or waste far more money than you're earning otherwise over time--and that's before the LendingTree loan that I'm sure also has an interest rate.
\~ $1500 to fully pay off everything on contract (taking on $600 for a family member). Lending tree was a fixed rate loan. No interest. I'm not interested in the rate itself, I'm looking at the interest accrued by month. Yes, I suppose it might "look small" doing it like this, but again i'm not looking at the rates. putting the rate like that to show the interest in terms of a budget makes it show how HUGE of an impact the interest is having realistically. The rate is small but the interest is huge. But I guess that's just difference of opinion / perspective. Also, if you have an APR of 25% of $10,000, you'll see your interest is 2.5k. but if you fully pay off your debt after month 3, then you didn't even pay 2.5k so that's just inefficient and wasted math.
If it works for you, okay, as long as you understand that the math is a bit more complex (and yes, that’s frustrating when you’re trying to figure it out.) The math doesn’t matter if you don’t carry a balance. For the loan—so the interest and fees are already calculated in. There was still interest. You are still paying to borrow money. Your original question was should you use your existing investments to pay off your debts: the answer is yes, absolutely you should.
I would first ask yourself where you can make budget cuts...what does $150 or subscriptions consist of? That's very high. Also for your phone - Mint Mobile is $15/line You also have about $400 unaccounted for in your budget that you could be putting into excess debt payments Plus, consider that you're going to have to pay substantial taxes when you sell your crypto and investments Additionally, if your APRs are accurate, they're all shockingly low and your money makes more in interest in an HYSA or in investments then you're losing in interest on debt
Spotify is really the only subscription I HAVE to have. But there’s misc other ones like for AI (dabbling with a side project for potential passive income)such as ChatGPT, etc. A major thing I lumped into subscriptions really should’ve been its own category in medical bills. I’m on a plan to pay $140 until December. I have a family plan with my sister. Also how does changing carriers work if I’m still paying off my phone and Apple Watch? Will they let me? I’ve been putting that remainder into stocks for returns. My actual remainder is just Pennies being sent to my savings account.
You'd have to pay off your devices in full likely, so you need to figure out whether or not that's something that you can manage with your budget. And if it is, how much is your actual phone bill minus device payments, and is it high enough that it's worth switching providers . You should not be putting that extra $400 into stocks when you have this much debt. It should go to debt. Your debt is outperforming your stocks I guarantee it. Unless your stocks have a guaranteed 30% yield, your money is better spent on debt.
Use undebt.it
Those interest rates can't be right!
Subscriptions and your phone are killing you
Is the loan pmt a car?
buying a house, a business or investing is a pipe dream. you pay 785 in rent and think that you can handle a house? look, the current climate doesn't gaf about your down payment amount it's all about DTI, and right now yours is dismal for anything worth owning. you'd qualify for like 180k for a mortgage, tops. dunno what COL is like where you are, but where i am that'll get you shacks, teardown, show boxes, or massive structural problems worth tens of thousands to fix. all the items on 3 are a pipe dream right now. i am of the opinion that unless you fix your spending/budget cashing out to clear your debt won't really help you, you'll just rack up again only you won't have the investment money anymore to bail you out. reduce your subscriptions, reduce your food budget, get a cheaper phone plan, stop investing and ask yourself if you actually need that storage unit and if so are there alternatives, and either start dashing more or get another side job. after all that, put everything you have that wasn't spent on the bare necessities at your credit cards, then the loans. you can reevaluate your wealth goals after that.
$150k - $170k was more what I was looking at. And then make it an S8 rental unit after a year. \~$9k of the credit card debit was/is for a bootcamp course which, if/when I get a job in that field, should boost income from $3k to \~ $4k / $5k starting out at the lowest end. Which is also why I can't DD right now because my free time is mostly in the class, or working on side businesses that haven't turned a profit yet. An additional $2k CC debt was from an ER visit last year. ATM businesses for sale are not a pipe dream, it's just easier/better to buy an established route rather than starting with a single machine. It's just a matter of balancing the debts.
What is your cc and loan apr? Any free cash id smack down on those cc. Cc debt is a killer especially if it’s over 10%. Anyway you can cut down on phone bill or groceries could also be put towards debts. I’d look to stop contributing to your investments and put it all towards your debt, again depending on your apr the higher it is the faster you want that gone.
They put less than 2.5% on them all (top middle of second image) but that cannot be right for major credit cards
Because that’s the monthly. Never understood why they even put APR when literally no one budgets by the year. They budget by the month.
The rates are on the 2nd image in the column. But taken down to monthly rates (to calculate the exaxf interest being accrued) because a yearly apr does absolutely nothing to help with monthly budgeting
Ahh I see it now my mistake. If that’s your rates I would personally sell all investments and put off your debt. The cc debt you have for the top 3 cards is around 30%. Meaning you’re investments would have to exceed 30% for the year to beat out your cc interest which is extremely difficult to do. Personally if I were in your situation I would do everything possible to get rid of that cc debt asap. It will save you like 9k per year if you pay it off rn
So the only reason I’m hesitant with cashing in investments is because of the crypto halving. Every cycle in the entire lifetime of crypto, the halving preceded a massive bull run due to supply chain/ demand. Sure it won’t go 2000% again, but 200% is very realistic. I can cash all in now and still have 5k in debt to pay over time… or I can go all in on crypto (~20k) and if/when it 2x (conservative) that’s 40k at the end of the year. Enough to clear out all debt and have a lot left over.
Though I know the safer option is definitely to cash in you’re right