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Living in New York is exciting, but it can also be expensive. Between rent, utilities, transportation and everyday incidentals, it's easy to accumulate debt without even realizing it. If you're Hispanic and you're dealing with late payments, maxed-out credit cards or loans that feel impossible to pay off, you're not alone. The good news is that it is possible to get out of debtIn this article I will tell you how to do it step by step, without technicalities, without detours, and with real examples that you can apply today.
Why is getting into debt so common in New York?
Before looking for solutions, it is important to understand the problem. New York is one of the most expensive cities in the United States. According to recent studies, many Hispanic families spend more than 50% of their income on rent alone. This leaves very little room to save or cover emergencies, and that's when people start using credit cards to "get by.
The problem is not the card itself, but rather that when it becomes an extension of the salarydebts start to grow rapidly. The same happens with personal loans, salary advances or even loans between family members.
But there is a solution, and here I explain it clearly.
Step 1: Recognize and organize your debts
The first thing is to face reality without fear. Open an Excel sheet or take a notebook and write down all your debts:
- To whom do you owe
- How much you owe
- What is the interest rate
- How much do you pay per month
- Payment deadline
Practical example:
Maria lives in the Bronx and has:
- $3,000 on a credit card at 27% interest rate
- $800 in arrears on cellular and electricity payments
- $5,000 on a car loan
With this list in hand, it is easier to make strategic decisions.
Step 2: Create a realistic budget
This is not about stopping living, but about adjusting expenses. Review your monthly income and categorize your expenses into:
- Essentials (rent, food, transportation)
- Non-essential (meals out, subscriptions, impulse purchases)
- Debts
Helpful Hint: Apply the 50/30/20 rule as a starting point:
- 50% for basic needs
- 30% for desires or lifestyle
- 20% to pay debts and save
If you're now using more than 20% to pay debts, it's a red flag. But don't worry, you can reverse it with discipline.
Step 3: Choose a strategy to pay your debts
There are two popular methods that work well:
a) Snowball (Snowball)
You pay off the smallest debt first, while making minimum payments on the others. Each time you eliminate a debt, you become more motivated.
Example:
Maria pays first the cell phone debt ($800), then the credit card, and finally the car loan.
b) Avalanche (Avalanche)
You pay off the highest interest debt first. Although it takes longer to see results, you save more money in the long run.
Example:
Maria starts with the credit card, which has 27% interest, then the car loan, and finally the cell phone debt.
Choose the method that best suits your personality. The important thing is to be consistent.
Step 4: Consider New York debt relief options
In New York there are several organizations and programs that help people with debt, especially the Hispanic community. Here are a few options:
a) Not-for-profit credit counseling
Organizations such as GreenPath or the NYC Financial Empowerment Center offer free advice in Spanish. They help you negotiate with your creditors and create a personalized payment plan.
b) Debt consolidation
If you have several debts, you can combine them into one monthly payment with a lower rate. This allows you to have more control and pay less interest.
Just make sure you do it with serious institutions and avoid falling into scams.
c) Financial relief programs for COVID-19 and other crises
New York State has launched special programs to help people affected financially. Find out more at nyc.gov or go to a local community center.
Step 5: Generate extra income (even if it is small)
Getting out of debt is not only a matter of spending less, but also a matter of win more. You don't have to change jobs; you can do small side jobs:
- Selling homemade food in your community
- Offer classes in something you know how to do (dancing, sewing, English).
- Care for children or elderly people
- Driving for Uber or DoorDash
- Selling things you no longer use on Facebook Marketplace
An extra $200 a month can make a difference if you use it to pay off debts.
Step 6: Change your financial habits
Getting out of debt in New York City is possible, but there is no point in getting out if you fall again. Here are some key habits:
- Don't use your credit card if you can't pay in full each month.
- Create an emergency fund, even a small one
- Compare prices before you buy
- Use lists to avoid impulse purchases
- Talk about money without fear with your family
Step 7: Celebrate progress
Every debt you pay, celebrate it. You don't need to spend, just acknowledge your effort. You can write it down in a journal, share it with your partner or give yourself a simple treat.
Example: Maria paid off her credit card in full and took a walk with her children in Central Park as a celebration. No money spent, but a lot of satisfaction.
Conclusion:
Getting out of debt in New York may seem difficult, but it is not. it is not impossible. With a clear plan, small daily changes, and the right attitude, you can regain your financial peace of mind.
Remember: you are not alone. Thousands of Hispanics in the city are on the same path as you. Take the first step today, because every dollar you pay brings you closer to a freer, financially stress-free life.
