the ugly side of the money mustache: a personal financial analysis, part II

Welcome to Part II of my personal financial analysis, Mr. Money Mustache style. For Part I, please read here!

This time, we look at the sad truth of being an unabashed consumer in my young twenties, as well as the scary reality of being a post-college student in today’s often over-priced advanced educational system.


Dear Mr. Money Moustache, I am in a State of Emergency. As a young adult, I received less-than-stellar advice on credit cards. Meaning I opened one, and as a young adult, I didn’t quite realize the implications of swiping that card on a regular basis. I’ve closed three credit cards, leaving only my SkyMiles card open, to which I charge certain purchases & immediately pay off (I moved across country and I miss my mom – SkyMiles are helpful). Regardless, I am having trouble making a dent in my debt. In the entire last year, I’ve only paid off a little under $3,000 of my total debt – a measly 5.4% of my total.

Student Loans

At the moment, I spend around $90 a month on student loans. This small amount will in no way pay off the $25k in debt I personally accumulated in a reasonable time frame – and when that is done, I also hope to address the student loan debt my parents accumulated for me.

The challenge I face at the moment is that even if I put all my extra money towards my Student Loans, I am currently capitalizing more interest than I am paying off, causing my loan debt to increase. Part of this is because part of my resources are paying off debt elsewhere, and I will be able to do much more good when I’ve addressed those issues – but right now, it feels like I’m falling into an abyss of doom.

Credit Card Debt

Like I said, I realize that I am in a state of emergency. Last year, I closed two credit cards by absorbing that debt into a small personal loan at a low interest rate.

As such, I am working hard to eliminate what miscellaneous debt I currently own, totaling about $3,500 – down from about $5,000 a year ago. I am trying to eliminate this debt first so that I can focus on Student Loans.

The Clown Car

All right, Mr. Money Moustache: I believe you. Getting rid of my car would be financially beneficial. Granted, it is currently out of the realm of possibility for me, at least in the near future: due to the dangerous nature of roads in the small, windy mountain town in which I live, owning a car was actually listed as a job requirement.

However, even though I plan to move to a bike-friendly city by the end of the year (and I am a huge fan of biking and walking to reduce living costs), I am not ready to give up my car. I like my car – love her, in fact. Her name is Gabby, she gets $37 miles to the gallon, and she’s almost as reliable as my mother.

Still, I could probably be more intelligent about this investment. Gabby costs a hefty $360 a month, plus gas and miscellaneous upkeep expenses. The debt repayment alone amounts to $4,320 a year.

However, I’m not sure how what my best option is – if I sell Gabby now, I would sell her at a loss and still owe money. As such, I don’t think it’s fiscally intelligent to make the switch right now? Though I’m always open to learning more! If I invest in a used car, that’s a significant chunk of cash I could save, even assuming the increase gas costs and the fact that I would still have a (significantly smaller) car payment. I could easily pay off the car more quickly and soon be investing that money in my student loans.

Right now, I’m not sure I’m ready to sell Gabby and scale back. But it’s an option I am (reluctantly) considering.


I feel like I’m drowning in debt. I realize if I could eliminate it from my life, I would be more than comfortable, with somewhere around an extra $500 a month going into my savings account, amounting to $6,000 a year. Considering my current lifestyle, I could save for four years and have a full year’s expenses in the bank – and that’s assuming my pay stays the same and I keep spending at my current rate, both of which I am actively working to change.