Turning Thirty and In Debt; Living in New York City

What’s the one thing we all struggle with in adulthood? DEBT! From school debt to credit card debt, we all owe someone something. If you don’t, lucky you. My debt included student loans, money spent starting multiple companies, and moving to different states all in my twenties. At one point my debt was above $90,000. Recently, I watched a video where this 25 year old who makes $70,000 or more a year pays all of her monthly bills, except her student loans. Her student loan debt is $115,000. I met a 23 year old who makes $163,000 a year and paid $12,000 of his student loan debt within five months. They both live in New York City.

Living in New York is expensive. I live in New York City and I make six figures a year with nearly $20,000 in debt. However, I have multiple strings of income and in 2018, I hired an accountant to help balance my income to debt ratio. The main reason for hiring an accountant was so I could purchase my dream home. Before hiring an accountant, I hired a debt relief company to go through my credit report and do an analysis. They help me raise my credit score and decrease my debt.

New York vs. North Carolina

I lived in Uptown Charlotte, North Carolina for three years and two months. Before the statewide quarantine executive order, I worked in both New York and New Jersey through out the week and I commuted and worked 10 hours per day. I spent two of those hours in traffic. LOL! The cost of living in North Carolina is a lot less cheaper than New York. Below shows the difference between my expenses living in both states:

Rent:

NC: $2,300 (two bedroom/two bathrooms/1160 sq ft.)

NY: $3, 200 (1 bedroom/1 bathroom/501 sq ft.)

Transportation:

NC: Less than $100 monthly

NC: $400 monthly

Utilities:

NC: Less than $100 monthly

NY: Nearly $300 monthly

Gas for car:

NC: $100-$150 monthly

NY: $300 monthly (work 6 days a week)

Going out:

NC: $50 -$75 each time

NY: $150 -$200 each time

Insurance (dental, car, renters):

NC: $430

NY: $800

Here is how I got out of debt:

*This is based on the money I had in my savings and having multiple strings of income, which gave me a head start. I also used the money from my retirement. I did not borrow money.

Step #1) I hired an accountant.

Step #2) I consolidated my debt. This will help decrease the interest rate.

Step #3) I created a budget and set saving goals for one year.

Step #4) I called each creditor to see if there were any special offers to reduce amount owed.

Step #5) I paid off the smaller amounts due in full first.

Step #6) I sold things I didn’t need or use anymore.

Step #7) I limited the quantity of non-essential needs (nails, hair, spa, eating out, going out, etc.)

Step #8) I saved a certain amount of money per month.

Step #9) I went generic.

How I raised my credit score:

Step #1) I consolidated my debt.

Step #2) I paid off 50% or more of my debt in a little over a year.

Step #3) I paid my bills on time.

Step #4) I got a credit card to use for small expenses, like gas, food, etc. I paid off the amount spent on the credit card before it was due. (Give or take, within 7 days)

Getting out of debt takes a lot of discipline and a lot of sacrifice. I did not do it alone. Between my accountant, the debt consolidation company, and individuals whose stories and concepts I used, I was able to pay off my debt and raise my credit score. I did however, use my own money. My success as a business owner and my career choices also helped me get out of debt and reach my financial goals.

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