#debtfree

Hope your day is going well! Just a quick financial question: how can I save up while paying off credit debt (🙃) and paying bills off?

I’m working but I’m only getting paid $15 ! And I’m also planning on saving for moving out. But I feel like it’s impossible. I want to build up a good savings account but I’m new at it as well.

Thank you!

Hi love! This is a vague question as I have no clue as to how much you make per month, what your monthly expenses are, the debt you've accrued, or the interest rate & terms of your credit card debt. Here are my general tips, but please note that I'm in no way a professional. Please contact a CPA for personalized, expert information on how to move forward with your financial life. Some high-level tips are below:

Track your income & expenses. Know exactly how much money is coming in and going out every month, so you know how much of your income is going towards your monthly expenses.

Do an audit of your expenses. See how much of your expenses are essential purchases. Without rent or utilities, I would imagine these are quite low (I don't know if you pay for any food at home, though).

Know exactly how much debt you're in and the interest rate of all of your debts.

Determine how much of your monthly income goes towards these essential expenses. Subtract this number from your post-tax income. Multiply this number by 3 to 6. This is the emergency fund savings you need in case any unforeseen expenses/job loss occurs. Use this information to determine your debt payment and savings timeline. Personally, I believe you should have at least a month of savings available for use before committing to paying off existing debt. This way, you don't accumulate more debt in the process of trying to get out of the debt you've already accrued.

Create a timeline with a self-assigned monthly payment plan to pay down your debts. When it comes to consumer debt, I believe outside of a small 3-month emergency fund, it is best to be as aggressive as possible to pay it down, especially if you're living at home.

For your savings, I HIGHLY recommend putting this money in a high-yield savings account.

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