Hi all. I haven't made the smartest money moves in the past but I would like to start. My mother passed a few months ago so I received about $20k in life insurance. That's no where near what I need to cover just credit card debt, but I would like to get some ideas on the best way to use it.
Here's the layout.
Gross household income is about $75k per year. House payment of $1050 and 401k loan come out pre-deposit so I usually net about $1K every two weeks. I keep about $1200 in savings for emergencies but not much else seems to stay there. Currently about $60k in my TSP/401k with 7% income contribution. Only 39 so lots of years until retirement. I'm married with 3 kids. Wife is a stay at home mom. I travel a lot for work so I do get some supplemental income from time to time and that it really what has kept us afloat.
$16,000 balance @ $400 p/mo - 401k loan (very low interest)
$4800 balance @ $300 p/mo - Same as cash (0% interest)
$9500 balance @ $300 p/mo - Credit union card (8% interest)
$7200 balance @ $145 p/mo - My Discover - 17% interest
$6700 balance @ $150 p/mo - My Citi card - %18 interest
$5400 balance @ $145 p/mo - Wife Discover - 17% interest
$5200 balance @ $120 p/mo - Juniper - 16% interest
$2100 balance @ $50 p/mo - Wife Citi card - %16 interest
$1700 balance @ $60 p/mo - Paypal - %18 interest
All told that's about $43k total for a monthly payment of about $1600. Needless to say I've spent myself into a corner and I need to figure out the best way to get out of it. As the price of everything continues to go up, it's getting hard to make it work.
My main questions are these:
1. Do I try a snowball and try to get out of it from the lowest balance up? I know that's a great idea, but it doesn't really help me survive check to check.
2. Do I drop it all on the 401k to net $400 more per month to survive on?
3. Do I drop it all on the credit union and same as cash loans to net back $600 per month.
The 401k, credit union and same as cash are the lowest rates, but they are also the biggest bang for upping the net per check....
I know there are several ways to approach it; I just don't know the best way to net more per month to survive on vs doing a debt snowball and trying to get out of it. Your thoughts and ideas are welcome. I don't think $20K is quite enough to consider investing in anything given my debt to income ratio at the moment. I know I'm paying stupid-tax...
Rick
Here's the layout.
Gross household income is about $75k per year. House payment of $1050 and 401k loan come out pre-deposit so I usually net about $1K every two weeks. I keep about $1200 in savings for emergencies but not much else seems to stay there. Currently about $60k in my TSP/401k with 7% income contribution. Only 39 so lots of years until retirement. I'm married with 3 kids. Wife is a stay at home mom. I travel a lot for work so I do get some supplemental income from time to time and that it really what has kept us afloat.
$16,000 balance @ $400 p/mo - 401k loan (very low interest)
$4800 balance @ $300 p/mo - Same as cash (0% interest)
$9500 balance @ $300 p/mo - Credit union card (8% interest)
$7200 balance @ $145 p/mo - My Discover - 17% interest
$6700 balance @ $150 p/mo - My Citi card - %18 interest
$5400 balance @ $145 p/mo - Wife Discover - 17% interest
$5200 balance @ $120 p/mo - Juniper - 16% interest
$2100 balance @ $50 p/mo - Wife Citi card - %16 interest
$1700 balance @ $60 p/mo - Paypal - %18 interest
All told that's about $43k total for a monthly payment of about $1600. Needless to say I've spent myself into a corner and I need to figure out the best way to get out of it. As the price of everything continues to go up, it's getting hard to make it work.
My main questions are these:
1. Do I try a snowball and try to get out of it from the lowest balance up? I know that's a great idea, but it doesn't really help me survive check to check.
2. Do I drop it all on the 401k to net $400 more per month to survive on?
3. Do I drop it all on the credit union and same as cash loans to net back $600 per month.
The 401k, credit union and same as cash are the lowest rates, but they are also the biggest bang for upping the net per check....
I know there are several ways to approach it; I just don't know the best way to net more per month to survive on vs doing a debt snowball and trying to get out of it. Your thoughts and ideas are welcome. I don't think $20K is quite enough to consider investing in anything given my debt to income ratio at the moment. I know I'm paying stupid-tax...
Rick
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