No matter how you cut it, debt is a very real part of our world, as much as we try to live on a budget. According to a recent CNBC study, the average American has approximately $90,460 in debt, which seems impossible to escape.
This is precisely how one Redditor feels based on a post they put up in r/personalfinance. Indicating that they feel like they are drowning in debt, this individual doesn’t know what to do, and whether regaining control of their finances will ever be possible again.
Drowning in Debt In 2025
Kicking things off, this Redditor is listing off her monthly fixed costs, which include rent at $1,250, a car payment of $568 per month, and car insurance that’s approximately $150 per month. As of the middle of August 2025, she was also facing credit card debt, with balances of $2,056 on her Apple Card, $1,700 on her Bank of America card, $4,500 on Citibank, and another $700 balance on a Discover card.
While these numbers might not seem like a lot, for someone who is 23 years old and working as a bartender making between $3,000 and $6,000 monthly, they feel like they are drowning. There is also no help being received from anyone (e.g., parents), so the Redditor is responsible for all bills and emergency expenses that come up.
On the plus side, this is good news, having moved out to live with roommates and no longer having to help out with her mom financially.
Credit Karma to the Rescue
This said, she has already gone through Credit Karma to refinance her vehicle, which helped her reduce the monthly payment to $411 for the car at 5.24% for 60 months. This is a big drop from her previous 9% interest at 75 months, but the $150 savings is already feeling more freeing.
How to Develop Good Spending Habits
Whether you’re in your 20s like this Redditor or someone much older, it’s never too late to develop good spending habits. You’re going to start by creating good budgeting habits, which means meticulously tracking your cash flow.
Build Your Budget
This means being able to account for every dollar that comes in and every dollar that goes out. How this Redditor or someone else creates a budget is up to them, as using a piece of paper or a spreadsheet is not crucial.
What does matter is that you know exactly how much you are spending on everything, so you can visualize where you can save and how you can create some extra cash flow. Make a list of everything you’re spending money on, like a car and car insurance, gas, groceries, cell phone bill, utilities, health insurance, and everything else, so it’s all visualized, including streaming services, which the Redditor smartly indicates she might be getting rid of.
In other words, this needs to be a FULL budget as other Redditors point out, so nothing is missing from the equation.
Pay Down Debt
In the case of this Redditor and anyone else in a similar position, once you have a firm grasp on your budget, it’s time to start paying down debt. While a car note isn’t considered bad debt, the credit card balances this Redditor has must be reduced before she does any non-emergency spending.
Ideally, she could look at getting a credit card that has zero-interest for 15 months or so to consolidate her highest-rate cards or all of them into one card if she can. While it’s not going to be fun, paying off debt has to be her highest priority.
This Redditor is a prime candidate for the snowball method, by paying off the smallest debt first, like her Discover card. Once this card is paid off, she should take the amount being paid to Discover and add it to the next highest balance, the Bank of America card, and so on until every card is paid off.
Don’t Ignore Any Option
Just as this Redditor did with Credit Karma by refinancing her car loan, this is a prime example of what everyone in a similar debt situation should do. The hope is that you can find help from either your credit card company, a mortgage company that might help you refinance, or even consider moving to a different, less expensive place.
The most important financial lesson here is that you shouldn’t ignore any option that might be on the table, including seeking financial counseling. There are plenty of local resources where most people live that are willing to help young adults establish good financial habits.
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