We need advice

[isaac]

How much of a tax refund do you guys typically get? If it is more than a few hundred dollars, you should consider adjusting your withholdings so you get more money each paycheck. Use the extra to pay off the debt.

This is smart, a few hundred dollars? I work with people that get upward of $7,000 back. They consider the IRS a type of "savings account", lol. If you consider a $2,400 return could have been an extra $200/mo on a 20% interest CC, that's a lot of savings. You're a genius skydivingchic!

[isaac]

Nobody mentioned your $850/mo Rent. I'm not sure where you live / what the cost of living is like there.

I live in rural West Virginia and $850/mo would be a VERY NICE PLACE, much more than my wife and I would ever need.

We currently pay $575/mo for a roomy 2bedroom/1bath apartment, but we checked right across the river from us (2miles) and there's a 1bed/1bath place for just $450/month. Since it's just Husband/Wife/Dog 1bed/1bath is fine, that's an extra $125/month contributed to our House Downpayment savings.


As far as $100/mo for Cable/Internet.. We cancelled our TV Service provider a long time ago. There's almost nothing available to watch that isn't available on the Internet. Plugged our computer into TV and Voila, every episode of any show you can think of. (Granted we hardly watch anything 'legally', not sure how you feel about that)

Internet - Ours USE to be $60 per month. A simple call to the cable office's retention department and asking them to match a competitors price. (in our case I said a very cheap local company was only $30/mo) I asked the lady very kindly to save me the trouble of switching and offer me a better deal.
The lady said certainly, placed me on hold for a minute, and came back with $35/mo offer. I felt brave and went out on a limb and told the lady "that's still $5/mo higher than competitor". She said she understood and put me on hold again. She came back with $25/mo. I pay $5/less than the cheapest piece of crap internet in the area, for GOOD internet! The deal only lasts 6 months, so every 6months I'll get another $60 bill, but I call and get it lowered again.

Also, they charged us $7/month for Modem Rental, quick trip to BestBuy and I think about $70 on my own Modem, waived this fee. It's more than paid for itself by now.

[Goldy]

Here is how I would pay off the debt. I know you said that you would like to pay off the lower balances first but it doesn't make sense to pay off a 0.0% card when you have others costing you 21%. With that said, if that 0% rate is going to balloon above 20% soon then yes make sure its paid off before it accrues major interest.

I know it feels really good to pay off a CC so I'd go ahead and start by paying off CC3 to get you on the right path then roll that extra money into CC2 and hammer that out till its done. Alternatively, if you could transfer CC2 to a low interest card then you could start working on the 13.2% loans starting with the smaller balance.

cc3 500 @10%
cc2 4000@21.0%
loan 1 2200 @13.2
car 1 6300 @13.2%
cc1 7000 @13.2%
car 2 3000 @6%
student loan 23000 @6.4
cc4 800@0%

This is going to take a fairly long time to deal with so make sure you are committed and ready to tackle this debt. Have you thought about selling car 1 and buying a cheaper car? You make good money right now but earning extra won't hurt, could you pick up a part time job to expedite this debt reduction?

Good luck and be sure to post updates every so often.

[Tree0164]

60k is not bad of an income. We need more information on your budget-there are alot of little details missing out there. I would recommend check out Dave Ramsey's baby steps. I would also recommend transfering your 7k to a lower interest rate card

[skydivingchic]

So that all adds up to $3065 per month. How much do you guys take home net each month? I'm guessing somewhere around $3500. If so, you have several hundred unaccounted for dollars each month. Where is it currently going? If you aren't really sure, you should spend a few months writing down every penny you spend anywhere so you can figure it out.

Your budget is missing a few things. What about car maintenance? Even though you don't necessarily spend money on this every month, you will have to get oil changes, replace tires, perform other routine maintenance, and make some repairs sooner or later. You should be setting money aside each and every month for stuff like this. Other things like this might be car registration, medical copayments/coinsurance, gifts, memberships and subscriptions, etc. Get these types of things accounted for as well.

The one expense that jumps out at me is the cell phones. That seems pretty steep. DBF and I just switched to pre-paid services and are saving a lot of money that way. When is the contract up?

Your dollar amounts for all the debt are nice, round numbers. Are these the minimums or are you paying extra on everything?

How much of a tax refund do you guys typically get? If it is more than a few hundred dollars, you should consider adjusting your withholdings so you get more money each paycheck. Use the extra to pay off the debt.

So after all that, lets say you have $300 extra each month to send to debt. You said you want to pay from lowest balance to highest, so your order of payment would be:
cc3
cc4
loan 1
car 2
cc2
car 1
cc 1
student loans

Paying in this order, I used a debt calculator to figure out that you would have the debt paid off in 40 months. You will pay a total of $6779 of interest.

A few things to consider to get things paid down faster. Either or both of you could get second jobs - mow lawns, shovel snow, work at a coffee shop, etc. Whatever you can find. It won't be all fun and games, but you only have to do it until you are out of debt and it will help accelerate your payment schedule. Also, do you guys have anything you can sell to make some money to put toward debt?

[asb2012]

Rent $850
Elec$100
Water/Sewer $50 every other month
Food$350
Gas $200
Car1$200
Car2$200
CC1$150
CC2$100
CC3$50
CC4$50
Phones$160 2yr contract
Student loan $190
Loan1 $110
Car Ins $130
Cable/Internet $100
Misc Haircuts/Clothing/cleanin supply all other stuff that pop up every month $100

Loan helped us pay for the wedding ( i know stupid)
Credit Card of $7000 i accured before we got married on mainly school books and a large bed

I know alot of choices we made are dumb but we are really trying to get it together especially before we start a family. I like the idea of paying off the small cards i think it will keep us motivated. I'm glad to know that our salary is above average it doesnt seem like it with all the debt we have. I hope I put all the right information on here

[disneysteve]

Welcome.

Congrats on your wedding.

First thing I'd say is $60,000/year is not "only" as it is above the median US income. You should be able to live just fine on that amount.

Second, as skydivingchic said, we need to see your budget.

Third, I'd want to know why you have the debt. What were you using the credit cards for (and that other $2,200 loan)?

[skydivingchic]

What does the rest of your budget look like besides rent? You will get much better advice if you can post a complete line itemized budget. We can help you find areas to cut back and figure out how much you have to put toward your debt each month.

There are two philosphies on what order to pay off debt. The first, which will have you paying the lowest overall interest, is to pay off from highest interest to lowest interest. So you would pay the minimums on all debt except cc2. You would send the minimum plus every extra penny on cc 2. When that is paid off, you would turn your focus, including the minimum payment for cc2, onto the next highest interest (cc1, car 1, or loan 1) until it is paid in full. Continue down the list until all debt is paid off. This method will cost the least in total.

The second method is to pay in order from lowest balance to highest balance. The advantange to this method is the psychological wins you get early on by paying something off. Much like the above method, you pay the minimums on all but the debt you are focusing on. Send every extra penny to that focus debt until paid in full and then move on to the next.

Choose whichever method will keep you paying off the debt.

You might want to focus on saving a small starter emergency fund before you focus on the debt. $1000 is a common recommendation here. Beyond a small emergency fund and contributing up to your 401k only up to the employer match, I think you guys really need to be focusing on debt reduction rather than saving.

Post more information and you will get more customized, personal feedback. There are many helpful and smart people here who are more than happy to offer advice and encouragement.

[asb2012]

We just got married May this year we are 25 and 23yrs old we are in bad debt with no savings what should we do first pay debt off or save or both? Our goals are to pay off debt and buy a house next few years. Together we only make $60000/yr with rent at $850 a month. We are not sure how to tackle the rest of our debt we just paid off credit card #5. We do put money in our retirement plans which we probably have a total of $6000 in there together.
cc1 7000 @13.2%
cc2 4000@21.0%
cc3 500 @10%
cc4 800@0%
student loan 23000 @6.4
car 1 6300 @13.2%
car 2 3000 @6%
loan 1 2200 @13.2