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Need ideas with debt and savings?

Just started working a month ago after college, currently make 550 weekly after taxes, will go down more in July once receive benefits. Have nearly 5000 in debt across 3 credit cards… 550 on 23%apr (ripped up) 1300 and 2800 on 15%apr cards. I used a Snowball calculator but am trying to distribute the money between all three equally cause I place my purchases on the two higher balances anyway before ripped up other card. My short term goals are to apply for an auto loan within 6 months and move into an apartment within 18 months. I would like to know if I need to Be Debt Free to obtain approval or possibly have some remaining debt. My initial goal was to place each paycheck into removing The Debt but then I would have no money left allocated for a down payment on auto loan as well as no money into an emergency fund for moving out. Is there a better method which may enable me to distribute my paychecks (debt, auto loan down payment, moving out)?

I would definately get rid of that debt before applying for a car loan. Having some debt wouldn’t stop you from getting a loan, but having CC payments in addition to a car payment and rent can be difficult for a young person just starting out. You don’t have Too Much Debt, so take advantage of that and get rid of it and don’t build it up again. Keep just ONE card, for emergencies only, throw the others away. See if any of your cards would allow you to transfer debt from the other cards to them with a low interest rate, and make that transfer if you can. Interest is everything. I would also suggest you buy a very inexpensive car, as you simply don’t make enough to try to afford a large payment. You may be able to DO it, but you don’t want to work just to pay for a car. Don’t get any of the add ons, no rustproofing, no extended warranty. You’ll also want to put at least $1000 down payment on that. Get rid of the 23% first. You will probably also need 1st and last months rent as a security deposit. You are in a good position in that you can control your situation rather than your situation controlling you. You don’t just have to do this within six months, you can do it when you have your finances completely under control. So don’t let the 6 months concept force you into an uncomfortable financial situation. Almost all young people make the mistake of piling up credit Card Debt and if you can avoid that, using them only for emergencies and things you plan to and can pay off each month, you will have a HUGE leg up on you financial future. In about a year, get started on a ROTH IRA so you have money as a geezer. So I don’t think it’s so much an issue of distribution, it’s more a matter of doing this in a controlled, orderly way and not forcing an artificial 6 month window to dictate your decisions.

DRIVETIME CHAT: DEBT: Episode 31