I Want To Get Out Of Debt But I’m Struggling And Feel Stuck


We recently got an email from one of our readers that we wanted to share with you (with her permission). You see, she felt stuck and she was asking for help. We explained to her that we don’t offer financial planning services or 1 on 1 consulting.

But we think answering her email can help a lot of you out since a lot of you ask the same things or are worried about the same things.

We want to remind you that we aren’t financial advisors. So this article is simply for your entertainment.

The Email From Sarah In Chicago

Hi Finance Twins,

I happened upon your posts on Instagram and wanted to reach out in hopes of getting some help from you.

I REALLY want to get out of debt. No, I NEED to get out of debt. But am struggling to allocate the remaining money I have from my budget towards debt repayment.

The reason I’m struggling with this is that I feel I already do so little socially and still am in debt and just feel a little hopeless and unmotivated to “struggle” for the next 5 years to save. I have a hard time accepting I can’t buy one coffee in the morning on the way to work or go out to eat just once a week. This sounds selfish and absurd, I know, but I want to be honest in order to really get some honest feedback from you. I 100% want to save and get out of debt. And I know I have to change my ways.

About Me

I’m a 29 year old female from Chicago (which is not a cheap city). I recently (1 month ago) moved to a further neighborhood slightly outside of the city with my fiancé to save on rent, as I was previously living alone in Downtown Chicago.

I have a monthly budget and broke down my bills into 2 lists on my phone to indicate which payments come out of my 1st paycheck and which come out of my 2nd pay (I get paid bi-weekly).

The budget lists my rent, renters insurance, groceries, phone, internet, public transportation, laundry, gym, Netflix, Spotify, bank fee, student loans, personal health spending (ex physical therapy, psychologist or skin care products I may run out of) and also includes the amount I’ve paying towards my debt (just slightly above minimum payments). I’ve also just added $100 savings from each pay check in the budget.

On a monthly basis my expenses add up to $2,370.

I have 3 credit cards (2 of which I turned off) 1 is active for ‘emergencies’ because I don’t have any money saved after moving. However, this card is almost maxed out now.

My debts include:

  • 3 credit cards and their balances are: $500, $3000, $2800 (active)
  • 1 low interest personal loan: $6,600
  • 1 high interest line of credit loan: $1,350
  • and I have $10,500 remaining in Student loans.

My total debt right now, including student loans, is rounded up to about: $25,000

My annual income is $47,500 before taxes.

I get paid $1400 bi-weekly, after taxes, so I get taxed about $11,100 per year.

In your opinion, what am I doing wrong/what do I need to correct to get out of debt? And with making the changes you advise, how long do you think it’ll take me to be out of debt?

Thank you so kindly for your time and I am looking forward to your response.



Getting Organized

I want to thank Sarah for taking the time to write her email to us and for allowing us to share it with everyone! She worries about having to struggle for the next 5 years, to stay afloat, but she needs to take action so that she doesn’t have to struggle for the next 50.

Our typical response to an email like that would be to reply with links to articles that we think could really help. Things like how to budget, how to manage your money, how to start investing, why your personal savings rate matters, what is lifestyle inflation, why it’s better to be wealthy vs rich, and what is financial freedom. You get the picture.

But today we wanted to treat her email a little different as we know many of you are in a similar situation. So here’s what I would do if I were in her shoes.

List Everything Out

If you have an ambitious goal you need to know exactly what you are up against. I didn’t get into Harvard by applying last minute and crossing my fingers. I worked tirelessly to make my application as strong as possible.

When it comes to money, you need to know exactly what your goals are. I recommend you use our retirement calculator to see how much you should be saving. The number will scare you. Big time. That was half the reason we made it. Fear has a funny way of getting people to move and take action.

Next you’ll want to start to craft your plan.

In her email, Sarah did a good job of laying out her situation.

Let’s recap everything.

Income & Expenses

  • After-tax income per month: $3,033 (since she gets paid $1,400 bi-weekly and there are 26 pay periods per year.)
  • Monthly Expenses: $2,370 (including minimum debt payments)
  • Monthly Net Income: $663


  • Credit Cards: 3 credit cards with balances totalling $6,300.
    • Their individual balances are $500, $3,000 and $2,800.
  • 1 low interest personal loan: $6,600
  • 1 high interest line of credit loan: $1,350
  • Student loans: $10,500 with medium interest rates.

Make A Plan

The first thing that jumped out at me is that Sarah has a pretty good handle on her income and expenses and has a budget already. Yes, her credit card debt isn’t ideal but it’s a good sign that her income is higher than her expenses. She also knew exactly how much debt she has.

That’s something that a lot of people can’t say.

In fact, her monthly personal savings rate of 22% ($663 / $3,033) is actually way better than average! 

Sarah asked two basic questions: What should I do differently and how long will it take for me to pay down my debt.

Let’s start with what she can do differently.

First, she needs an emergency fund to make sure she stays afloat if she loses her job or something like that. Even saving 1 months worth of expenses (rent, food, etc.) will be a good starting point. Then she can begin to worry about making MORE than the minimum payment on her debt.

The Credit Card Debt Needs To Be Prioritized

It’s clear that the most important thing Sarah can do is to stop racking up credit card debt. Digging the hole deeper will only make it harder to get out of it down the road.

But before you pay down debt, you need to decide whether it’s better to pay it off or invest that money. However, it’s essentially a no-brainer when you have high interest debt like credit cards.

When it comes to debt, you can there’s two basic ways to decide how to pay it down. You can use the debt snowball and pay off your debts based on the balance size (making the minimum payment on all debts and then 100% of the remaining funds on the debt with the highest balance). Or you can use the debt avalanche and pay off the loans based on which has the highest interest rate.

For this example I am going to utilize the debt avalanche because she makes it clear that she wants to be debt-free ASAP.

Few things will cripple your personal finances like credit card debt since they have crazy high interest rates (15%+).

Consider A Balance Transfer Card

If I were Sarah I would tackle the credit debt HARD. Since her credit card debt is $6,300 and her monthly net income is only $663, it’s clear that it’ll take the better part of the year to pay that off. During that time, the interest can add up quickly, meaning she’ll end up paying more than the $6,300 she currently owes.

To avoid that from happening, I would find a new credit card with an awesome balance transfer introductory offer. You can often transfer a balance and get a 0% interest rate for a year, so that would give her 12 months to pay the cards off completely. According to this, “most providers allow you to transfer two to five balances to one card. As long as your total transfer balance doesn’t exceed the balance transfer limit — usually between 70% and 100% of your credit limit — you shouldn’t have an issue making multiple balance transfers on the same card.”

It’s important to remember that she needs to continue to make the minimum payments on all of her debts so that they stay in good standing and don’t get sent to collections so that her credit doesn’t get ruined.

The High Interest Personal Loans Needs To Be Paid Next

Next, Sarah needs to repay the $1,350 high interest personal loan. She doesn’t specify the interest rate, but if it’s higher than any of the credit cards then it needs to potentially be prioritized even more.

I think you are starting to see the pattern here. Paying off the highest interest rate loans first means less interest paid, which means being debt free sooner.

With The Medium And Low Interest Rate Debts Remaining, She Has More Choices

Now that the high interest loan and credit cards are paid off Sarah needs to decide if she should continue to plow everything she has into the debt or if she should start to save a little bit.

If it were me, I’d want a slightly larger cash cushion for an emergency and would try to get 2 months worth of living expenses saved. I would then split the extra left over every month between the debt and investing. I would first leverage a Roth IRA when it comes to investing. This assumes she is contributing to her work-place 401K (if her job offers one). 

It would delay the amount of time until she becomes debt free, but it would get her in the habit of investing for the future, and it gives her money a chance to start working for her. Even if she’s only investing $100 per month and using the remaining $500+ to pay down the student loans she would still pay them off more quickly.

Paying Off Debt Takes Time

When it’s all said and done, it will likely take Sarah around 3-4 years to be completely debt free unless she’s able to increase her income or decrease her expenses. Her first priority to increase her income should be to do an amazing job at work so that she gets a promotion or raise.

Eventually she can get a higher paying job at competing firm and will be able to negotiate a pay raise.

She doesn’t mention how many hours she’s working, but if she’s able to create a side-hustle or a second stream of income, that could be a way for her to do it much faster.

It could be something as simple as driving for Uber on the weekends for a few hours, or turning a hobby into a side business.

The fact that she just moved in with her fiancé may also signal that she will be able to potentially lower her expenses if they can combine forces and cut out duplicate expenses (no need for 2 Netflix Subscriptions, sharing other bills, etc.).

It’s clear that there’s no shortcut to getting out of debt, but the fact that she’s reading this site bodes well for her future. It’s a better use of her time than online shopping, that’s for sure.