Making a plan to pay back my debt.


I owed a lot of money, I knew that. But letting people know the details of it, the extent? That was hard. My debt made me feel weak. And even though I knew something had to be done about it, and I knew I needed help figuring it out, I didn’t want to appear weak.  I wanted help badly, but I didn’t want anyone to know how badly I needed it. It’s stupid, I know. But feelings.

So there we were, my gentleman and me, sitting at the table with all my money owed glowing from my laptop’s screen, and duplicated in his hand on the back of a blank envelope.

He wasn’t trying to make me feel bad, he insisted, “but holy shit. If I were you I’d be freaking out about this,”he said. “How are you not freaking out about this?”

After a few more talkings-to, he set out to help me make a plan:

1.) Determine your monthly income

First he asked me: “How much money do you make. What’s your monthly income.”

I make 47k/annually, paid out twice monthly. After taxes and dental and everything else, that comes out to $2,844/ month.

2.) Determine your fixed expenses.

Then, “What are your bills. What do you have to pay every single month. Not your credit cards, not that shit. We’ll get to that later.”

My rent, my car payment, car insurance. My cell phone bill, my internet, electric.
“What else?” Netflix, hulu, gym membership.
“Cancel that shit,” he said. “You don’t need it.”

I pay my friend every month for Coachella.
“Poor people don’t get to go to Coachella,” he told me. I said nothing.
“Student loans,” he continued. “Yes?” Yes.

We took my monthly income. Subtracted all my monthly expenses – my rent, utilities, internet, phone bill, my car, insurance. I kept Coachella.

3.) Determine your flexible expenses.

We took what was left. “How much do you spend on groceries a week?
I’d spent $40ish the last time I’d gone.
“Let’s just say $75. So we’ll give you $300 a month for food.”

I also need gas. I fill up.. Idk every 8, 9 days?

4.) Do the maths.

After all that we looked at what was left.
About $1000. I understood it as 70% of a paycheck. He explained instead that it’s 35% of my income, and to provide some comfort he said it’s not that bad.

I don’t think he asked me if I can do it. I think he said it’s what I have to do.

A few things I learned that night and in the following days:

  • Good intentions don’t pay bills. Acknowledging a problem is not in itself a solution. I needed a plan, with numbers and limits.
  • Overestimate your spending. Limiting my food budget to $40/week would be more challenging and more miserable. Giving the wiggle room of $75 is realistic and even leaves room for optimism. (I try to stick to the $40 anyway, and don’t freak out if I go a bit over as long as I’m within that $75.)
  • Have some perspective. My coworkers invited me to grab acai bowls with them for lunch. While it sounded tempting, I had already packed a lunch and an $8 bowl did not sound like it was worth 20% of my self-imposed food budget. Thinking about your spending this way can help you avoid impulse purchases.


Make Your Own Plan:

  1. Determine your monthly income – After taxes, what is your take home pay each month?
  2. Determine your fixed expenses – These are the absolute necessities that keep a roof over your head, the lights on in your home, etc
  3. Determine your flexible expenses – These are also necessities, but you have a bit more control in the ultimate cost. For me it’s just gas and groceries.
  4. The magic formula: Value 1 – Value 2 – Value 3 = USE THIS AMOUNT TO PAY OFF YOUR DEBT.

(Please note that I am broke as a hiliariously unfunny joke, so I don’t factor in / allow for discretionary or frivolous spending. This is a plan for hardxcore debt reduction so bear with me.)

The real figures:

$2,844 monthly income.

– $690 rent
– $56 internet
– $15 electric
(residential expenses: $761)
– $301 car payment
– $75 car insurance
– $66 cell phone bill
(mobile expenses, pun intended: $442)
-$122 coachella

-$1,324 fixed expenses.

-($75 x 4) groceries
-($35 x 4) gas

-$440 flexible expenses.

$2,844 – $1,324 – $440 =


Rounding this down to $1000 means I have $80/month that I can save. BONUS!
The plan isn’t at all disheartening. In fact, for me it’s exciting to have rules and I am relieved to have put this all out on the table, literally. Finally someone had looked at my mess and was just real about it. Was just like, Yeah this is fucked up, and this is gonna be tight, but you can make it out of this. I was, and still am, filled with a refreshed optimism and I feel so ready to start tackling this money monster.

Next post: Making a plan to stick to the plan.


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