I’m $10K in debt and I only make $30K a year. How do I navigate my way through it?

Dear Dave,

I need help. I am way behind on my basic utilities and my taxes. I have tried to start the Baby Steps, but everything is so overwhelming right now that it is easy to get discouraged. I am 33, I live in Los Angeles, and I average around $30,000 a year doing behind-the-scenes work in the entertainment industry. My total debt is about $10,000. Can you give me some advice?

Cameron

Dear Cameron,

I know you’re in a scary place right now, brother. But I’m glad you’re getting on board and that you want to move in the right direction with your finances.

Before you start the Baby Steps, you should get current on all your bills. Make a list of all the bills you’re late on and how much it will take to get current on each one. Then, create a written, monthly budget. Once that’s done, and all your expenses and income are accounted for, you’re going to squeeze every penny you can from there and work your late list from smallest to largest until everything’s current. You’re going to feel a sense of relief and accomplishment every time you flip one of these bills. And believe it or not, the act of simply making a list will help reduce the stress you feel, because just by doing that you’ve established the size of the dragon. This dragon must die, and you are the knight who’s going to kill it.

But listen, there are two sides to this equation — income and outgo. No offense, but $30,000 a year as an income in Los Angeles stinks. You’ve got to do something to make more money. Hey, $10,000 would literally change your life. Not everyone can say that. The bad news is, you’ve got $10,000 worth of debt. The good news is, you’ve got only $10,000 worth of debt. I’m not talking about some little minimum wage deal, either. I want you making some real money. Don’t do anything illegal, or something that would compromise your morals, but get after making some good money.

And long term? Dude, you might want to think about taking a step up in your industry or even a full-blown career change. I mean, you don’t want to be making $30,000 a year and still working a side job when you’re 50, right?

You could be debt-free, and have a much better life, in a year or less, Cameron. Go do this.

I want you to win!

— Dave