Getting Out Of Debt: Creating A Budget

Getting Out Of Debt: Creating A Budget

Welcome to the newest installment of “Getting Out Of Debt,” a new series where I realize just how horrible my financial situation is and figure out how in the world I’m going to rectify it. If you missed the last column, read Getting Out Of Debt: Credit Cards.

I’ve come to terms with my finances. At this point, I now know that I’m $122,544.16 in debt, and I need to get out of it ASAP. After a couple of mental breakdowns and consoling myself with individual boxes of wine instead of the bottles I now realize are much more expensive, it’s time I come up with a plan for what exactly I’m going to do about the financial scaries. All I can say is thank goodness all of Taylor Swift’s music is back on the free version of Spotify, because I haven’t been able to stop asking myself “Are we out of the woods yet?” since my latest article was published last week. The answer to the question stuck in my head? Not until I build a budget.

I’ve been putting this off for a long time, mainly following the idea that “what I don’t know can’t hurt me.” Until now, my payment model has been getting money on payday, paying the next 14 days’ worth of bills and minimum payments, and then spending the rest until it runs out. It was totally working – well enough, anyway – until I realized that I needed to actually come up with a plan for my money to get me out of this debt. From all of my forays into Dave Ramsey, Reddit, and a dozen personal finance blogs, everyone seems to be in agreement – creating a budget is the first step to getting out of debt for good.

The theory is simple enough. List your income, deduct your expenses, and use the remainder to pay off your debt. What people don’t tell you is that this process is literally physically painful. It will hurt deep in your chest. Listing every single expense as a line item in Excel and assigning a number to it that will subtract from your hard-earned dollars in your sum total will feel like you got the wind knocked out of you. You mean to tell me that I’m barely scraping by because I’m spending half of my income on minimum payments on accounts I’m not even using anymore? Knowing you’re paying a lot in interest is one thing, but seeing it written in front of you hurts worse than your first high school breakup.

Because I could pay my bills, I assumed my financial situation was fine. Spoiler alert: it’s definitely not; in fact, I’m amazed I’ve been able to survive this far as it is. All this time, I’ve been wondering how everyone I know keeps going on these absurdly lavish vacations, and now I know – either they have way higher credit card limits than I do, or they’re out of debt. I knew that every month I paid the minimums on my credit cards and loans; what I didn’t know until creating a budget was that I’m spending $712.11 every month just paying these minimums and ensuring I never get out of debt.

The driving force behind all of this is the end of my student loan grace period, and if the online repayment calculators are to be believed, I now have less than 6 months to get that $712.11 balance down to around $250 by the time my payments kick in for me to continue paying everything off without major changes to my quality of life. From my outstanding balances, this means I have about $12,000 of debt to pay off, or around $2,000 every month. This means a couple of things – my income is going to have to increase by a lot, and my expenditures are going to have to decrease by a lot to free up some extra cash.

To say that I’m not thrilled about this would probably be the understatement of the century, but I’m committed to the cause. I’ve figured out my plan of action; now, I just actually have to act on it. Luckily for me, this budget has helped me see that even though $2,000 every month seems extreme, things may not be as hopeless as they seem. As a recent graduate, I’m not exactly raking in the dough in my post-grad paid internship, but I do know that as I continue interviewing for a full-time position, my income can only increase. Second, considering that I spend nearly every free dollar at Publix or restaurants, I’m going to start getting creative with my meals, and hey, maybe I’ll even drop a pants size or two as a result.

It’s not going to be fun, but if I can survive the next six months living off of pasta, beans, and Black Box, I just may be able to pay off this debt after all. Now if you’ll excuse me, I just have to casually come up with two grand before next week. According to my brand new budget, this should be a piece of cake.

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Steph W.

Steph W. is a new Master's degree graduate with an intern's salary and six-figure taste. She realizes her expectations far exceed reality, so she spends her days pinning away Loubs she pretends are in her physical closet instead of her virtual one. Her hobbies include attempting to trapping her boyfriend into marriage before he finds out how insane she is and pretending that Black Box wine tastes as good as the kind she could afford when she was gainfully employed. Send her tips for getting out of student debt at

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