Post # 31
sarfin914 : My other reply took a while to respond to everyone. I wanted to add to my other reply as well. My interest rate on my car now is AMAZING. I just had a family member purchase a “new used” vehicle and their’s was like 8% I think… I’ve got my reasons for buying new and I don’t really want to debate that because I am OK with having that (obviously I’m driving this car into the ground and won’t have another car payment until I NEED too as a PP said).
Post # 32
Would you be able to put your SLs on income contingent repayment plans? Not having any idea what your financial situation is, that’s just spit ballin’.
Post # 33
anev : I am under the assumption that this debt is going to take a few years to pay off – not a few months. That’s why I think it’s too much time to stop retirement. I have an account I put about $20-25k of my own cash into when I was in my 20s (there were some employer contributions in the early years as well). I haven’t touched the account in 5 years and it’s up to $90k and is projected to hit a $1 million by the time I retire without any additional contributions. That’s HUGE. I’d have to be destitute and homeless to stop saving for retirement.
Post # 34
I think I took WAY too much time to reply thoughfully to everyone, lol.
I’m checking on the card ASAP. I’m kind of indifferent to having it, honeslty but it was a situation where I needed an “easy” one for my old job (to which I was new to at the time) for expensing things. Wasn’t the smartest with it, have been paying debt off of that religiously because I KNOW interest rates kill you. I totally get that. I do appreciate everyone’s concerns about interest rates hiking up astronomically.
anev : Wishing you the best of luck with the fertility treatments! Things WILL work out for you 🙂 I can understand needing to temporarily hold off on the aggressive debt payments. I was fired and without work for about a month, so that put a lot of paying stuff down on hold. I didn’t think about retirement as far as saving for that… so thanks for putting that in my head as well!
beantime : Interesting idea! I know the student loans aren’t “bad” debt but still just gross to think that I have them. Wish I didn’t, but I definitely value my education a lot.
annabananabee : Thanks for the ideas! I didn’t even know a debt caculator exists but will explore that a lot more. I feel your concerns on the CC debt, trust me I do. I have considered taking a sum out of savings to pay it off or at least most of it, so thats still an idea. I guess if I do that I can always just then view savings as a “payment” in my budget and pay back into it to build it back up.
sboom : I’ve considered consolidating the debt but wasn’t sure how to go about it. You make a very good point in the benefits of doing so, so I’ll put it on my list to research more into it. Thank you!
Post # 35
1. How much in your savings do you have? Is it enough to pay for a car repair if needed? If so, I’d stop contributing to it for now.
2. Still contribute to your retirement
3. Use the snowball method: https://www.nerdwallet.com/blog/finance/debt-snowball-calculator/
Pay your lowest balance off first and continue from there. You’ll pay the minimums on your other accounts.
4. Download the app Mint on your phone. Stick to a budget.
You can do it! Honestly, your debt isn’t that bad. Student loans are the worst but they’re not considered a “bad” debt.
Post # 36
Buying new isn’t always a bad thing. I bought my car new with a loan because it came with a 1% interest loan. I had the cash to just buy it in full, but had better things to do with the money at that interest rate. The newer cars had better safety features (side view camera etc.) so it was worth it to me.
I disagree with paying off the smallest loan first. Prioritize highest interest rate.
Post # 37
kmbumbee190618 : I agree with most of the other posters- pay off the highest rates first, which will be the the CC. There’s no way in hell it’s 0% forever and carrying consumer debt is not financially smart. Then attack student loans and car loan in order of interest, not amount.
I can’t believe I even have to say this, but… PLEASE do NOT stop contributing to your retirement account. LilliV : is spot on.
Not that you’re considering it, but other readers might- It’s utterly stupid to make another financial mistake in order to solve your current debt situation. You’d never replenish the compounding that you’ve missed out on and will hurt you more than your current loans will.
Post # 38
kmbumbee190618 : What are you degrees and career? Do you qualify for any loan forgiveness programs? That could help clarify your repayment priorities.
Post # 39
mooncrown : for kicks I just used a calculator to figure out how much I’d have to save to catch up if I took that $90k out now and started over. It’s $700/month for the next 35 years! That’s $294k to make up the same amount as that $20k I saved in my 20s. I’d rather keep putting in zero now and hit the same goal than put in $700/month. Granted this isn’t exact because I did have some employer match, but still. It’s a lot to catch up.
Post # 40
kmbumbee190618 : credit cards, then car (depreciating in value), then fed loans/school loans.
BUT dont stop paying them. id pay the amount due or a little over on the last few and the credit cards need to be taken care of first girl. Credit buraues look at how much you are using from your credit limit.
Post # 41
anev : The interest on her debts are less than what she would be earning on a typical 401k, and that’s not even factoring in the compounding. I agree with you that she should redirect the savings — earning 2% while she’s paying 5% doesn’t make sense. But her retirement is probably earning over 5% AND is being compounded AND is reducing her taxable income. Giving that up would be penny-wise but pound-foolish. And if her employer matches any part of her contribution, that is literally giving away free money. Even if they’re not though, with her low interest rates, it makes more sense to keep putting into retirement. Unless she finds out that Discover is about to skyrocket. If that’s the case, then yes, she should pause the retirement contributions until that’s taken care of.
Post # 42
- Wedding: October 2016 - Wedgewood Las Vegas
I’d tackle the credit card debt first. Secondly, I’d focus on the next highest interest rate loan you have and really try to knock that out.
Create a strict budget, and stick to it. If you’re really serious about getting out of debt then you really need to cut any ‘extras’ out of your spending. This includes any fun shopping, going out to eat, coffees, etc. It sucks big time, but really is the only way to reduce debt quickly. It won’t be forever, either, and really is worth it in the end.
Lastly, stopping contributing to your retirement isn’t the death-knell some PP are making it out to be. However, it also shouldn’t be something you should jump into without a really solid plan that you KNOW you’ll stick to. Your age, income, and how many years you have until retirement will really play into the decision as well. As will the length of time you would be stopping the retirement savings. A single year may not negatively affect you long term, but multiple years might. A good financial counselor will be able to help you decide if this is something you need to do or not.
Personally, I don’t think you’re really in a dire enough situation to stop the retirement plan at the moment. I have much, much more student loan debt than you, and I haven’t gone through that route yet, and will not likely do so.
While I’m not technically following Dave Ramsey’s plan, I do listen to his show on the radio. It has helped me make some financial changes, and does inspire me to do better. It is inspiring to hear about others who are in the same pickle as I am, and learn from them about how to get out of it.
Post # 43
mooncrown : Yes, CC has always been the priority. I’m way over-paying on it now, so that number goes down every single week. I keep it open for emergency purposes but don’t carry it with me so I’m not tempted to spend.
100% agree with the retirement, its a good idea in theory but I couldn’t ever not contribute. I’m actually in a waiting period for my current 401k to kick in with my current employer (been here since Nov) and I get a killer match when I hit my 1 year. It hurts internally knowing I’m essentially a year behind putting in because of that gap, but I can’t really help it too much, hence why I probably won’t ever NOT contribute.
glitterati : Marketing & Communications but in a niche market. As nice as it would be I know i definitely don’t have that option, lol.
ladama : I always pay over, but I think I need to lessen my “over” amounts and put it towards my higher interest payments. At least thats where I’m leaning based on some advice here and how it’ll work best for my own lifestyle. Luckily my credit is actually very good! Blessed with that though it can be a curse when a CC company says “Oh we just upped your limit” or approved me for some obscene amount because I’m very much a “If I think I have it, I’ll spend it” type of person. Working hard on that!
Daisy_Mae : see my previous comment to a PP about retirement. Its a crappy situation to not be putting in currently but Darling Husband and I had a good start before I switched employers. My current employer offers a 20% match up to 10% which is pretty great for my area so I’m looking forward to being able to max that out when I hit my year.
steny03 : I see where you are coming from. I’ve got time and a good 401k benefit package like I said, so I’ll take full advantage of that. I’ll have to give some of his radio shows a listen. I know the debt I have isn’t terrible, but it sucks nonetheless. I’d rather take away my fun spending, etc and pay it off and be somewhat debt free (maybe minus a car payment and mortgage) than have the other “extras”.
Post # 44
kmbumbee190618 : I think the wait to join the 401k is sort of a silver lining. That’s such an amazing match that it would give me extra motivation to pay off the debt to be sure I’m able to max it out!
One thing that really helps me keep spending under control (although admittedly I’m not a big spender anyways) is to budget misc. spending weekly. I take our monthly income, subtract out set bills and savings, and the divide the leftover into weekly chunks and track all of the misc spending in a simple phone app. Anything left over at the end of the week I either roll forward to the next week (depending on the amount and my expected expenses) or transfer into a separate “fun” savings account where I save up for bigger expenses. For example my budget is $200/week. That’s for groceries, clothes, gifts, random parking meters, dog treats, haircuts, manicures, random kid stuff, coffees, EVERYTHING that isn’t a seperately budgeted line item (gas for the car and medical care have line items in the monthly budget so aren’t included here). My husband’s budget is for his stuff and family entertainment. The worst case scenario is you want to buy something and you’re out of budget that week so you have to wait a few days which is much easier to do than waiting a month.
Post # 45
There is a “we are debt free” board over on babycenter that is really helpful if you’re willing to list out your whole budget/expense info. You don’t have to have kids to post there either lol. There are some super smart ladies who are totally great at this stuff.