I stumbled across this forum while googling how to cut my debt down quickly.
A little background:
I'm 29, married and have a newborn. Single income family with a net monthly income of $3450. Gross of $68k per year.
The company I work for matches 401k contributions @ 50% up to 6% and I have always put in 6% or more (currently at 6% though) and my 401k is ~ $77,000. Unfortunately we do not have any savings or an Emergency Fund and this is something I want to fix.
Our debt is as follows:
Bill - payment - rate - term - owed amt.
Mortgage - $1050 @ 2.875% - 15 year loan - $115,028
Car 1 - $417 @ 2.49% - 5 year loan - $21,279
Car 2 - $307 @ 2.99% - 3 year loan - $1,725
Student loan - $165 @ 3.5% - ? - $16,907
Credit card - $145 @ 8.99% - n/a - $7,356
Utilities ~$290 per Mo.
Car insurance - $164 (driving record ain't great but have been without a ticket for ~ 5 years)
Cable & Internet - $145
Cell phone x2 - $136
Groceries and anything else - $450 - $500
Still collecting all of the medical bills but have been putting $100 a month toward them and the total looks to be ~ $3700 still left.
Now for the good news!
Tax returns are just around the corner and overtime is plentiful at work.
I took a loan against my 401k this past year to refinance the house and lock in my nice low rate shown above (previously was 6.385%) but I had to come up with principal as the adjuster failed to count our 3rd bedroom as a bedroom and therefore compared our sq footage to 2 BR homes in the area (so needless to say we looked as though we were upside down in our home and had to generate equity to refinance).
So every paycheck has $170 taken post tax to repay the loan ($340 per Mo.)
I have promised my loving wife that we would purchase an SUV and the one that she really likes is ~ $28 - $31k
Now my initial plan was to bust tail at work (~ 40 hrs of OT per month) and pay off car #2 before tax time and then sell car #2 for hopefully ~ $7000 and combine this with OT and tax returns to pay off all of our medical bills and the remainder of the 401k loan (roughly $10900 by the end of April which would be when I plan on selling the car and putting the wife in a new SUV) which would allow us $340 more a month just from not having the 401k loan. This combined with not having the payment from Car #2 would be $647 extra each month (before buying the SUV)
I normally seem to get interest rates on car loans in the 3% or less range and I believe I can get down under 2% for this one (last time I checked my credit I was somewhere north of 745) which should keep the SUV under $500 per mo.
Now my thoughts were to tackle the CC first as it has the highest int. rate of anything and then snowball that money into car #1 until it's paid off and again roll the now freed money into the new SUV (now car #2)
I'm sure someone is going to say "in order to get out of debt you don't buy a new car!" And they'd be very right, but my poor wife has sacrificed enough and this is one thing I'm pretty hell-bent on giving her, not to mention it will make things easier with the baby and traveling to her parents.
So I guess my question is "what would you guys/gals do?"
A little background:
I'm 29, married and have a newborn. Single income family with a net monthly income of $3450. Gross of $68k per year.
The company I work for matches 401k contributions @ 50% up to 6% and I have always put in 6% or more (currently at 6% though) and my 401k is ~ $77,000. Unfortunately we do not have any savings or an Emergency Fund and this is something I want to fix.
Our debt is as follows:
Bill - payment - rate - term - owed amt.
Mortgage - $1050 @ 2.875% - 15 year loan - $115,028
Car 1 - $417 @ 2.49% - 5 year loan - $21,279
Car 2 - $307 @ 2.99% - 3 year loan - $1,725
Student loan - $165 @ 3.5% - ? - $16,907
Credit card - $145 @ 8.99% - n/a - $7,356
Utilities ~$290 per Mo.
Car insurance - $164 (driving record ain't great but have been without a ticket for ~ 5 years)
Cable & Internet - $145
Cell phone x2 - $136
Groceries and anything else - $450 - $500
Still collecting all of the medical bills but have been putting $100 a month toward them and the total looks to be ~ $3700 still left.
Now for the good news!
Tax returns are just around the corner and overtime is plentiful at work.
I took a loan against my 401k this past year to refinance the house and lock in my nice low rate shown above (previously was 6.385%) but I had to come up with principal as the adjuster failed to count our 3rd bedroom as a bedroom and therefore compared our sq footage to 2 BR homes in the area (so needless to say we looked as though we were upside down in our home and had to generate equity to refinance).

So every paycheck has $170 taken post tax to repay the loan ($340 per Mo.)
I have promised my loving wife that we would purchase an SUV and the one that she really likes is ~ $28 - $31k
Now my initial plan was to bust tail at work (~ 40 hrs of OT per month) and pay off car #2 before tax time and then sell car #2 for hopefully ~ $7000 and combine this with OT and tax returns to pay off all of our medical bills and the remainder of the 401k loan (roughly $10900 by the end of April which would be when I plan on selling the car and putting the wife in a new SUV) which would allow us $340 more a month just from not having the 401k loan. This combined with not having the payment from Car #2 would be $647 extra each month (before buying the SUV)
I normally seem to get interest rates on car loans in the 3% or less range and I believe I can get down under 2% for this one (last time I checked my credit I was somewhere north of 745) which should keep the SUV under $500 per mo.
Now my thoughts were to tackle the CC first as it has the highest int. rate of anything and then snowball that money into car #1 until it's paid off and again roll the now freed money into the new SUV (now car #2)
I'm sure someone is going to say "in order to get out of debt you don't buy a new car!" And they'd be very right, but my poor wife has sacrificed enough and this is one thing I'm pretty hell-bent on giving her, not to mention it will make things easier with the baby and traveling to her parents.
So I guess my question is "what would you guys/gals do?"
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