4 weeks ago
What To Do About Debt

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There have been many blogs that deal with allowances, how much to ask for, and how often. I won’t talk about that today. I would rather deal with the topic of what to do with this allowance once you have it in your hands already. It is a popular stereotype that young people can’t hold on to their money. I don’t believe that for a minute, I just think that in our country we don’t give financial education much attention and instead we let people figure it out on their own. When was the last time you saw a class in high school or college on money, debt, saving and investing? I think a class on this topic should be mandatory (a pet peeve of mine).

Let’s say your SD gives you $2k in cash each month and that your relationship lasts one year. That is $24k in cash. Not a small amount. Your next steps will depend on your individual circumstances. But here are the main things you can do with this money, provided that you have already taken care of your basic housing and food bills:

  • Pay down debt
  • Save for a rainy day
  • Live, within reason
  • No one-time gifts, pay yourself first and invest, invest, invest for the long term

First, let’s talk about paying down debt and we can discuss investing in future blogs.
If you have a credit card that charges the typical 20% annual interest, you NEED to pay that debt down, and you need to pay more than just the $25 minimum each month, otherwise high interest on the remaining balance on your debt will compound and accumulate. If you keep charging on this card and only paying the small minimum monthly required amount, this means that your debt will never be paid off.  Ever…

I think the best strategy is to divide your debt into smaller amounts. Instead of looking at a large $10,000 balance (which could be pretty daunting) it is easier to divide it up mentally in smaller and more manageable amounts. Say for example you just added $400 to your existing credit card balance because you bought college textbooks. I would recommend the next time you get your allowance pay down that full $400 balance before you do anything else. If you can’t pay it in full the next month, at least set the mental goal to pay it down as soon as you can. This way, no interest or very little interest will accumulate on that specific balance. As well, you will now feel more confident and relieved that you able to start dealing with the debt monster, and this will make you more confident to start paying down even more debt in the future.

Pay down the debt on the card with the highest interest rate first: This one is pretty obvious since you will want to get rid of as much extra interest payments as possible

Transfer your high-interest balance to a lower interest rate credit card. If your balances are large enough perhaps you can transfer that to a card with a 0% promotional interest: Some credit card companies offer these promotions at times, so be on the lookout for special offers like that. You might be able to save some money this way.

If you have several credit cards, consider paying off the one with the smallest balance first. This way you can claim a small victory against debt, and then proceed with slaying the larger balances.

So, if you follow the simple steps above, paying down debt becomes a virtuous cycle that will make you breathe easier. Bear in mind you may need to sacrifice a bit: Cut some dining and entertainment expenses in order to budget more for debt repayment. The main point is to give each dollar you earn (work or sugar allowance) a purpose. You will find out that when you get organized about that dollar, you have less time for impulsive spending. And impulsive, disorganized spending leads to debt as night follows day.

You may have noticed that some of the pointers I have offered are actually mental tricks to get you to focus on small steps, small victories and conditioning yourself to live within your means and making every dollar count with a purpose to make you more independent

The benefits of being disciplined and debt free is worth it, your future self will thank you!

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19 Responses to “What To Do About Debt”

  1. MIke says:

    This post is excellent and SD’s are supposed to be either great earners, great money manager’s or both in order to have $25K and up in purely disposable income to spend on a SB, we need to be better mentors!

    David is 100% correct with his ideas and my added advice is to take this concept of breaking your debt into smaller amounts, a bit further.

    Use your bank’s free online bill pay to set up recurring payments to your credit card company, not in monthly payments but in weekly payments. This breaks down the perceived barrier even more. Set a goal of when you want to have your credit card paid off, divide the balance due by the number of weeks in the period and then set up a recurring WEEKLY payment using your bank’s free online bill pay service. Set it and Forget it! Move on with your life and before you know, that debt is gone!

    Another strategy is to have your SD make your allowance payments directly to your credit card company and you can “sugar” your way out of debt!

  2. MickeyGreenEyes says:

    I love indeed the article
    Very realistic… Sometimes I really think this site helps the ladies creating debts because all sugar daddies will at least pay 2000/month

  3. Anonymous says:

    Live within your means, sacrifice, work hard and you won’t need the sugar lifestyle.

  4. Smart man says:

    Nothing will save you from debt until you understand material objects are not the ticket to happiness.

    • class_act says:

      material objects? I have student loan debt!

      • LieutenantTwink says:

        Lmao, literally. That and medical bills. I wish I was in debt with material items, but I can’t even afford food cause I cant even work due to my health. Lmao. How nice it must be to not have student and/or medical bill dent.

      • theforeverstudent says:

        I was thinking this while reading the article. Credit card debt would feel like nothing compared to these student loans! Haha. I wish someone would’ve taught me about finance and investing before I’d graduated.

      • Anonymous says:

        Thank you!

      • Anonymous says:

        I’m on SA in order to avoid student debt! Easier to hit the ground running after I graduate than to spend the next 10+ years paying off a student loan that’s accruing interest.

      • Queen of the west says:

        AGREED! I make pretty good money for a single mom with a bunch of business related expenses. However I’d love to ACTUALLY have more money to put towards my student loans, that and I don’t even want a traditional relationship!

    • Anonymous says:

      Yes I agree, I had some major financial problems within the last few years and trying to recover is extremely difficult. Any advice?

  5. Anonymous says:

    How do you manage debt when you’re disabled and three years still waiting for disability to go through? 😉

    • Anonymous says:

      you don’t spend for internet and computers for starters. and if you smoke, stop. that alone will save a lot of money to go towards debts.

  6. Anonymous says:

    Thank you for sharing David, true they should teach this in school at early age. I would highly recommend everyone to read/listen to Rich Dad Poor Dad book by Robert Kiyosaki and Sharon Lechter. This advocates the importance of financial literacy as well as increasing one’s financial intelligence.

  7. Hellayella says:

    You’re only young once until you are a dollar short of bad decisions in your life, so take full advantage of youth…

  8. Aseeking says:

    Like the article. Can we also have an article targeting men who advertise as “generous sugar daddies” and who contact babies with the messages like “can you fly yourself to me,” “how much are you earning/will be earning with your degree,” “what is your major, ha ha ha just curious” “buy me this or that” and “can you pay to repair my roof because we will both live here” in the very first message? Once was even asked to pay for a tractor.

  9. MissSoCharming says:

    Great article! Managing money is definitely hard for some people but you had great ideas for people to learn from on how to manage it better.

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