Aug 10, 2026
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Add us on GoogleAmericans have amassed $1.2 trillion in credit card debt and owe $1.69 trillion in car loans. For many, figuring out how to pay off their debt can be a challenge.
A 26-year-old with $45,000 in debt recently took to Reddit for advice. In the post, the Reddit user laid out their situation. They owe roughly $25,000 in credit card debt and $20,000 on a car that they purchased in 2024. The total monthly payment on the car is $635.
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“I went through a massive breakup after moving to a HCOL [high cost of living] area, went through several layoffs, and my spending got out of control while trying to cope with all of the sudden life changes,” they wrote.
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All of their credit cards are locked, but they remain unemployed for another month until they start a new job. After taxes, net monthly income will be about $5,000. The job also comes with a $7,000 quarterly bonus that looks pretty attainable, according to the post.
As far as expenses, monthly necessities come out to $2,200 per month before debt payments. They live in a studio apartment. Not to mention, a large portion of weekly meals are covered while they travel for work up to four days a week.
An $800 entertainment budget
This all should go a long way in helping them pay off their debt if the income is managed correctly. However, commenters on the post took issue with one budget line item in particular: an $800 entertainment budget.
“You’re not going to be doing any entertainment till the stuff’s paid off, get your head out of the clouds,” one person wrote.
Another commented, “$800/month on entertainment while you have almost 50k of debt seems excessive.”
For their part, the creator of the post said that after all expenses, they will be left with $2,000 to allocate towards the debt every month, not counting the aforementioned quarterly bonus. They would also be willing to sell their car. They want to at least pay off their credit card debt over the next year because of the high interest rates.
“I’m truly just looking for financial freedom and if it means I have to sell a car I’m not driving for half of the month anyways then it’s whatever I guess,” they said.
Moneywise reached out for comment, but did not hear back in time for publication.
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How experts say you should pay down debt
There are a few ways many experts generally recommend paying off consumer debt.
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The first is the avalanche method. This entails tackling your highest interest debt first, likely your credit cards, in order to save the most amount of money over time in interest.
There’s also the snowball method, in which you pay off the debt with the smallest balance first to give yourself some early wins and, in turn, feel like you are making real progress on what you owe.
Before deciding which of these approaches to take, personal finance expert Ramit Sehi says you should call up your lender and ask them to lower your annual percentage rate (APR).
Experts also recommend taking out a consolidation loan, if you qualify. This has two benefits. First, it simplifies payments by allowing you to pay one creditor instead of spreading out payments across multiple lenders. Consolidation loans also offer lower interest rates than credit cards.
Once you get out of debt, hunker down on building an emergency fund, which you can turn to in the event of a catastrophe and avoid getting back into debt.
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Danni Santana is a journalist based out of New York City with a decade of experience reporting and editing business stories about retail, restaurants, sports, and personal finance.
