Nathan, 31, is a party animal with a spending problem. How can he tackle his $10,000 debt?

Nathan has a spending problem. The 31-year-old ad agency co-ordinator earns $52,000 a year, and his love for partying and going out has put him $10,000 in credit card debt.

After being cooped up in the pandemic I just want to let off some steam," Nathan says. Everything is stressful, everything is expensive. Work is stressful and job security is stressful and all I can think about is seeing friends and going out to be happy."

Nathan eats out a lot throughout the week and takes Ubers everywhere. Over the weekends costs pile up as he is often at a party or a rave that has an entry or ticket fee, sometimes back to back on Fridays and Saturdays.

This is where I end up spending a lot of money. Ubers, drinks, dinner before going out, late-night takeout, entry fees, it all adds up. Then I'm hungover the next day so I order brunch or meet friends and colleagues for food," Nathan says.

At this point, he admits he has buried his head in the sand even though he acknowledges he has a spending problem and little self-control.

I know I'm bad with money and I spend mindlessly. I have one of those budgeting apps but I don't have the discipline for it," he says. I don't know how to reel it in and I need advice other than get an app.' "

What can Nathan do to rein in his spending and pay down his debt?

We asked him to share two weeks of expenses to get a better idea of his spending habits.

The expert: Jason Heath, managing director at Objective Financial Partners.

Thirty-one-year-old Nathan likes going out and having a good time but also wants to pay down his credit card debt. The problem is those goals may not be compatible.

He has a budgeting app and knows he spends too much. He reached out to Millennial Money, so clearly he wants to get help. But in this case, he needs to help himself.

If you want to pay down debt, you have only two options. You can earn more, or you can spend less. Nathan could get a part-time job to supplement his spending if he is hesitant to cut back on his entertainment budget. It is easier than ever to earn a little extra with a side gig.

Looking at his expense tracking, most of his spending was discretionary. He eats out a lot and estimates he spends five times as much on takeout and restaurants compared to groceries. He orders brunch on weekends because he is too hungover. Maybe part of the tradeoff to be able to afford to party is prepping brunch before he heads out to a rave. Or trading his eggs benedict delivery for a bowl of cereal and a banana.

He uses ride-sharing a lot as well to get around town. If he wants to cut costs, he lives on the subway line, and could opt for public transit for one leg of his trip.

Part-time work or making sacrifices on his discretionary spending are the only ways to pay down debt and continue to enjoy his lifestyle.

Nathan says part of his reason for going out a lot with friends is because life is stressful, and it helps to blow off steam. I worry that if he cannot pay down debt and start to save, or worse, his credit card continues to grow, his financial stress could someday take over. He may not always be able to live with roommates. He may want to have a family or retire someday. If you dig a debt hole when you are young, it can make it harder to get out once your priorities change.

I would focus on the credit card debt first and foremost. The interest rate is around 18 per cent. Even if he can put cash in a savings account at four per cent, he'll earn $4 per $100 per year in the savings account, but he'll accrue $18 per $100 of credit card debt in extra interest. He'll fall behind by $14 per year per $100.

So, I would only put money in a savings account once Nathan is debt-free.

Then I would open a TFSA account and put money in every paycheque to build up an emergency fund. The trick is then committing to using that money only for a true emergency as opposed to raiding it for concert tickets. I know it can be easier said than done. I was young once and prioritized my social life (including raves!) over saving money for my future self.

Results: He spent less. Spending in week one: $529 Spending in week two: $462.50

How he thinks he did:

Reaching out for advice helped motivate Nathan, who says he put $100 toward his credit card immediately and tried to stick to a budget for a night out with friends.

Nathan also made it a goal to not eat out for dinner which he says has made a difference."

It's a challenge when you're used to spending without thinking. I'm used to instant gratification and I need to rewire that," Nathan says.

Take-aways: Heath's advice was a good kick in the pants," Nathan says.

I obviously knew there wasn't an easy fix, but seeing it spelled out and even starting to think about things financially like an adult helps motivate me," Nathan says.

I'm definitely looking into picking up a side gig and also changing jobs entirely for a better salary."

Ghada Alsharif is a Toronto-based staff reporter for the Star. Reach Ghada via email: galsharif@torstar.ca