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Welcome to Money Talk for Real, podcast where I talk about making money, spending money, and everything in between. I'm Nick, and in this episode, I have another listener-submitted financial situation that I want to talk through and run through and hopefully help some people out, whether it be the person that submitted this or if you're listening, maybe you can relate and I can help you out. Um, they did not send an audio submission. It was just filled out on the form uh on the website. And if you want to submit your financial situation, I can walk through that as well. You can submit it at money talkforreal.com slash debt help. That's money talkforreal.com. You could also just click on the debt help link. Okay, their information. They are 27 years old. They are single, they're making about $68,000 a year. They say they're not exactly sure what their take home pay is. Maybe like $4,200 a month is what they're thinking. Their expenses, they are uh $1,500 for rent. They have a $410 car payment. They pay $140 a month in insurance. They're estimating $400 a month for groceries. Um, if they're, let's see, eating out, they say probably $400 to $500 a month. Random spending, no idea, maybe $500. Okay. That uh totals to be $3,400 a month. Their debt, they have credit cards, about $6,000 balance, student loans, about $12,000 balance, and their savings, uh, $1,500, $1,500 in savings. They're saying, I feel like I should be better with money, but I don't know what I'm doing wrong. Where should I start? Okay. Perfect. Um, okay, so we're at $4,200 a month bring home pay. I just added up their expenses. The eating out, they say $400 to $500. So I just averaged $450. The random spending, they said no idea, maybe $500. So I, you know, I figured it at $500. So based on just their expenses with no debt pay down per month, they're at $3,400 a month, and they bring home $4,200. So they have $800 a month left over. They have the $6,000 credit card and the student loan of $12,000. Okay, so what I would recommend, I don't think you're doing bad with money to the person that submitted this. Um, I don't know that you're necessarily doing anything wrong. You say you feel like you could be doing better with money. You don't know what you're doing wrong. Honestly, I think you're okay. What I would recommend here is if it's just you, you're 27 and you're single, the rent, $1,500, not bad. That that's pretty good rent. Car payment, $410. My question would be, what um, you know, what kind of car is it? That that's still not a terrible car payment, though. Um, insurance $140, that seems in line. Groceries, $400, that's fine. Eating out, I think, is going to be the big one. Um, and I don't think that you necessarily need to cut that down to zero. But if we're figuring you're saying $400 to $500 a month, can we cut it back to maybe $200, $250, maybe? If if you're at $500 and you can cut it to $250, you're cutting it in half. That's $250 a month right off the bat that you would uh have saved. Random spending. Again, I don't know what this is. Um, maybe $500 a month. Can you cut that back to maybe $300? Again, I don't I don't know what the situation is. Even if you cut it back to $400 from $500, that would give you an extra hundred bucks a month. So if you can cut back on the eating out and the random spending, you could be looking between $350 to $450 a month on top of the $800 additional you already have. You have $1,500 in savings. What I would do, step one, is for the next give it two months. I would, if you could cut that back on your eating out and you could cut back your random spending, you could be at about $1,200 a month extra, $1,200 positive cash flow. And if you can put that $1,200 a month for the next two months into your savings account, that would put you close to having $5,000 in your savings account. That would be step one, in my opinion. Now I understand you had the credit cards and the student loans. Make the minimum payment on those for the next two months until you get to $5,000 in your savings account. After that, I would take that $1,200 a month and throw it at the credit card balance because it's only a $6,000 balance. And if you're making the minimum payments for two months, that'll go down a little bit. But once you get to that, you know, you get the $5,000 in your savings and you throw $1,200 a month at your credit cards, you're that could be paid off in six months. Make the minimum payments on your student loans while you're paying off the credit cards, but get your credit cards paid off. Those have high interest uh rates on the credit card balance. The credit cards can be paid off within six months. By the by the by the fall of 2026, those could be paid off. Then take the $1,200 a month and put it towards the student loans. Maximum you owe on student loans right now is $12,000. That will go down though. But let's just pretend that it stays at $12,000 and you do $1,200 a month. That's 10 months. You're out of that debt too. So within a year and a half, within about 16 to 18 months, you can have your student loans and your credit cards paid off. Then I would take the extra money, the extra twelve hundred dollars a month, maybe split it at that point. Take $600 and stash it in savings. Maybe take an extra $300 and throw it towards your car payment to stack towards the principal on the balance of the car. If you can do that, depending on how much you owe, how much you have left owed on the car, your car payment could be paid off within a year or a year and a half. Right? So we're looking if if, and I don't know your situation, it's easy for me to talk, right? But if you can do the things I'm talking about, you could be completely debt-free in two years, two and a half years, maybe. A car that's paid off, no credit cards, no student loans, $5,000 plus dollars in your savings account, and then do whatever you would like. Invest some of the money, save the money, work towards a house payment if you're interested in getting a house one day. I really think that within five years, you know, and that's very conservative, I think it's a lot less than that. Five years, you could have the completely debt-free and close to $15,000 to $20,000 in a generic savings account. And at 27 years old, five years from now, you're barely 30. That's a great way to start your life. Now also understand that your situation can change in five years. 27 years old is the grind stage. You're at a job that you will probably see raises significantly or promotions within the next five years. And what I would recommend, my piece of advice would be that when you see that extra income come in, don't increase your expenses. Don't go get a new truck, don't go get a new car. Just keep living on what you're living at right now. The groceries $400 a month. That could go up depending on food prices. But try to lock in everything else, right? The random spending, again, can you get that down any? I don't know. I don't know the answer to that. Um the other thing that some people forget, though, just going on a tangent here, about a car is that not only do you, if you get a new car, do you have a new monthly payment, but you also have potentially have insurance amount that goes up. In this example, their car payment's $410, their insurance is $140. Well, if you go get a new car, let's pretend like it's the same monthly payments, $410, but it's a new car. So your insurance instead of being $140 could be $200. So just be careful with that. But to answer your question, I don't feel like you're doing anything wrong. I don't feel like you're doing bad with money at all. Um, I think you can, you know, just be intentional, put some money away, get a little bit more in your savings account, and start attacking the credit card debt. That's number one. After that, attack the student loans. That's number two. Now, essentially, your consumer debt is gone. The only thing you have is a car payment. Keep the same level of attackness to pay off that car payment and you're debt-free within two years. Now, if you're listening and you have follow-up questions to this, please reach out to me. I'd love to help you. Um, and we can talk about it in private. If you're listening and this uh you have a financial situation that you want me to talk about, I'd love to talk about it. I'd love to help you. I'd love to give you my advice for what that's worth. And you can submit that on moneytalkforreal.com. For now, please leave a five star review. Comment if you have any questions, reach out to me if you have any questions. I appreciate you listening, and I'll catch you on the next episode. This is Money Talk for Real.