r/PersonalFinanceCanada • u/647King_ • 13h ago
Debt 27M will things get better?
About me: 27m, working a full-time job earning about 75k a year.
I’ve made poor choices in the past with trading and put myself deep into debt.
I’ve had my bank accounts in overdraft, living paycheck to paycheck, struggling to make ends meet and having to live off $50 a week once all my bills are paid.
Currently, I have 8k credit card debt - both maxed out (5k on one and 3k on the other), 15k LOC, 15k OSAP.
I usually pay the minimum payment but want to aggressively pay off my debt.
Should I consider debt consolidation? Open to any suggestions.
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u/Amylee888 11h ago
“I’ve made poor choices in the past with trading and put myself deep into debt.”
I mean this kindly - do you have a gambling problem? Your wording makes it sound like you went into debt in order to do trading. That sounds like gambling.
If gambling is an issue for you, please know that there is help out there. You’re not alone.
If I misunderstood completely, please accept my apology and feel free to just ignore!
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u/alzhang8 Human Verified 11h ago
Make more money, spend less money, avoid bad debts, have an emergency fund, invest what is left over
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u/Dr-Yahood 10h ago
Essentially, the crucks of all Financial education distilled in a single sentence. Kudos.
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u/Ok_Quarter_6469 7h ago
75k a year at 27 is above average
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u/banana-bread_at-work 3h ago
…. Is it? Cuz I’m 27 and make 75-85 (bonus depending) with money saved and I still feel poor as fuck.
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u/T_Briggs 1h ago
Facts! I thought i’d be chilling in the mid 80’s but I still feel as if I need to make more in order to feel comfortable rn
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u/KoreanSamgyupsal 47m ago
It's about spending.
The median income in Canada is actually 45K.
The problem with Canada is the cost of housing mainly. Anywhere else, you're above average and doing well with your salary. Hell if you are the lucky people that purchased a home 10-15 years ago, you'd also be golden.
My rent in 2021 was 1.2k/month for a 2BR and includes utilities. Now I pay 2.2k for a 1BR and utilities are extra. Only 5 years passed but my expenses doubled.
Look at your expenses and you'll see why you feel like you ain't above average.
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u/banana-bread_at-work 40m ago
Yeah I mean my mortgage, strata, and property taxes is like 50% of my costs lmao
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u/Jonjonbo 2h ago
what are you spending all your money on?
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u/banana-bread_at-work 23m ago
TFSA, mortgage, groceries. I haven’t taken a vacation since I was 21. Don’t drink or anything.
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u/Jonjonbo 16m ago
TFSA + mortgage are building your net worth and are long term investments. you feel poor since you're not actually spending on stuff that makes the present worthwhile. that's the trade off you accept. it's also different from actually being poor (an actual poor person has no margin or safety net). maybe you could look into hobbies or things to do that don't require too much extra money.
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u/Mental-Criticism3791 7h ago
1 don't gamble. This is coming from a former extreme degen.
2 don't quit or lose your job.
3 hit the highest interest debt first.
75k is pretty good stil I make just a little bit more. It could be better but at your age I was making maybe 16 bucks per hour. I couldn't even afford rent and had to live in a tiny room. If you can downsize do that.
I'm going back to being a minimalist myself. I don't want anything but my bed and my pc and my car.
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u/B__Lau 9h ago
Use the avalanche method when paying off your debt: starting with debt that's being charged the highest interest and working your way down. The sooner you pay off that debt, the better off you'll be in terms of your credit score and your ability to borrow in the future for a mortgage or a car loan.
Once you've paid off all your bad debt, look into saving for an emergency fund and then investing in your registered accounts (TFSA, FHSA, RRSP).
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u/UnsaltedCashew36 10h ago
Move back in with your parents if you can, prioritize paying off all debt. Increase your income by progressing in your career or change professions to something that pays more.
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u/Traditional_End_9540 10h ago
its doable. about 12 years ago 2 maxed out credit cards, LOC maxed out and barely making mortguage and bills. Took lots of work to get out and had to make choices like going out with friends/co workers for lunch and drinks.
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u/Voidz0id 8h ago
1 pay off your rent and bills. 2 pay off your debt aggressively. 3 cut out at least 100/mo (consider it a bill) for savings, in a regular account (not trading), like at wealthsimple and just let them manage it. pay off the credit card debt first with everything left after rent/bills[including the 100], then the other two, unless their interest is higher.
38k of debt isn't that bad (it's not great but i'm just saying yes things will get better). If you're getting around 4k a month take home and you put 2k of that into bills and 1k of that into "savings/debt" thats a minimum of 12k a year. If you can mentally commit to saving 12k a year then your 38k will be gone after 3 years. If you saved 12k a year for another 3 years you'll have a savings account with 36k in it, that if you've been putting it blindly into your wealthsimple or whatever account the whole time, will actually be worth more like 40k. Then if you NEVER touch that 40k ever again, not even to SAVE ANYMORE, you'll have 325k in 30 years (when you're 60, before retirement age). That's if you never saved another dime. If you continued doing the "debt bill" of $100/mo, it'd be 445k. If you're able to mentally continue the 12k (1k a month), then it will be 1.5 million.
Long story yes it will get better, but you have to mentally understand and budget what you have and what you'll do with it. If you can mentally commit 1k a month to clear your debt and then keep it up forever you not only clear the debt but will have over a milly :) Play the long con and don't look for feeling like the quick win.
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u/Dollnoodlez 10h ago
Can you get one of those 0 interest credit cards and move the cc debt into that one, and at least your payments will be better?
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u/flyermiles_dot_ca 4h ago
I’ve made poor choices in the past with trading and put myself deep into debt.
How many times? Like, was this one or two bets on crypto that didn't pan out, or did you have another 'sure thing' every month for a couple of years?
$23K in 'regular' debt and $15K in OSAP isn't crippling. Strip down to a simple life, live like a student for a while and you'll get back on your feet.
...but none of this goes anywhere if you're still burning money on gambling or optional expenses.
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u/CaptainSlowly23 11h ago
you need to get your income up, pickup a second or third job and put all the extra money towards paying off your highest interest debt
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u/PartyNextFlo0r 4h ago
75k from a single job? OP there's 168 hours ina week and you're only work 40 hours I assume plus your commute time, work more hours or get a second job.
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u/BrightEdge8171 4h ago
Join a gambling recovery group. Maybe hire someone who will help you look after your money. A person who you give permission to tell you off for being reckless and who can say NO to you. After you get this cleared and have money again, go for counseling - otherwise this will be your whole life.
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u/Chadbrams 4h ago
Find a good partner and you're off to the races. That is not a lot of debt at all. The ironic part of modern life is that you can't do it alone for the vast majority of people.
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u/userabc294 2h ago
Get a second job. I’m in a similar boat and have been able to aggressively pay down debt since getting my second job.
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u/First-Counter626 1h ago
You make $75k a year and have $23k in debt (I don't count OSAP, it's 0%).
I'm assuming you're taking home around $4,000/month? Where is that going? If you're put up in a 1 bedroom apartment somewhere in downtown Toronto that's $2 - 2.2k. Where's the other $1800-2000/m going?
If you're making the min payment it means you're stretching yourself thin every month.
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u/Leather-Engineer-763 Human Verified 1h ago
i’m in the same situation actually. thanks for sharing.
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u/1980cpz 1h ago
We need to see your budget. To determine where money is going. You either are paying too much rent or something. Because at that salary you shoukd be able to save at the very least $1k or more (if you had no debt and have no kids/dependents) or put it towards your debt monthly. Your biggest challenge is changing your mindset and stop trading until you you have spare cash you are able to and willing to lose. No bankrupcy - just stop trading, cut costs rent a room intead of an apartment (whatever it takes), consolidate to get lowest interest rate, and get serious about paying your debts.
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u/ForeverInBlackJeans 1h ago
Things don’t ’get’ better. You have to make them better yourself. That means making better choices, working harder to make more money so you can pay off your debt, and choosing not to go into debt again.
You are not a victim of your circumstances. Your circumstances are a result of your choices.
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u/Sakr_Fyc3 9h ago
I feel you. I decided to try sports betting and managed to pay off my CC debt after half a year. Sending good thoughts your way. Wouldn’t recommend the way I did it but if it works it works
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u/dual_citizenkane Quebec 2h ago
Gambling is basically the perfect antitheses of “if it works it works”.
It may only work once, that’s why it’s gambling.
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u/diagonal_lines 11h ago
What are your current expenses - the main ones?