Dear Cary,
I'm 25 years old and at a bit of a crossroads in my life. I'm recently out of a long-term relationship with the man I thought I would marry, and during the course of the relationship he asked me to make some very poor financial decisions in a well-meaning attempt to get me to be happy, with the intention that he would take care of me and it wouldn't matter if my credit was a disaster, as long I as I was happy and not working at a job that was giving me panic attacks (which I was at the time). So I followed his advice, quit my job and moved in with him, breaking a lease. Two weeks later he lost his job as a Web developer. We lived off his unemployment while we struggled to find work, and when I took a job as an administrative assistant (I have a degree in graphic design, but I can't get proper work in that field; there's no more money in graphic design than there is in being an administrative assistant, and I just plain don't enjoy the work), he began sleeping with another woman and left me. (That's the short version of the breakup, which is a whole different story.)
So now I'm trying to figure out what I want to do with my life. I have $4,500 in credit card debt on one card that I've not paid on in seven months. I also have $2,500 in debt from the broken lease. My student loans are currently deferred (though they really aren't problematic -- I just can't afford them currently because of my other debt). And I'm successfully paying on my car and paying my rent. I should also mention that I don't live extravagantly by any means. I almost never eat out, I drive a small, fuel-efficient car, and I don't have health insurance.
The problem is, I'm still stuck in the town I went to college in and I hate it here. It's cheap to live in, I've got a job that makes just enough for me to pay my bills but not pay down my debt, and I have a few friends here, but they keep on moving away. I don't want to continue to be left behind in a small Texas college town. Ultimately, I want to move to New York City, in a year, but I'm not sure how to pull that off. Would it be in my best interest to declare bankruptcy? It doesn't seem like I have that much debt, student loans aside, but I can't afford to pay it down (and the student loans won't go away with bankruptcy). I'm all right with getting a second job for a while to save up to move to NYC, but I don't want to work enough hours in addition to my current 40-hour-a-week gig to save up for a move and pay off debt. Should I give up on moving to the city for the time being and stay in Texas where it's cheap and be a slave to paying off the mistakes of my last couple of years, or be more rash, sell off my car (which won't fetch me much), stop making excuses and just move?
Broke in Texas
Dear Broke in Texas,
Financial worries can be a huge drain emotionally. I think you would be better off if you committed to spending a couple of years more in Texas trying to get stable financially. New York is such an expensive city, and such a challenging place, I think you'd want to be in a stronger position financially and emotionally before you made the move. Particularly if you are prone to panic attacks, your first priority should be your health and financial stability. Worries about money are the last thing you need right now.
I'm a little surprised that graphic design is not paying any better than administrative assistant work where you are; my observation is that pay for graphic design is low in magazines and newspapers but higher in corporate work, public relations and advertising. You might look into doing some freelance corporate work; I think you could make some good money that way, if you can find the work.
While filing bankruptcy may be an option, I would think of it only as a last resort. You can't afford to pay down your debt yet, but once you increase your income you will be able to. So I suggest you concentrate on increasing your income. Continue to live frugally, cultivate patience and get some stability. I think you'll be happier if you approach it that way.
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