Credit Card Debt

[cdorfish]

That's great.

Does your husband have any additional savings beyond this $3,800?

Yes, last time I checked, there was approx $17,000 in his account. Again, we keep it separate because it is what works for us. We both contribute (he contributes more) to our joint bills, and we both pay our own bills/debts separately. (i.e. He has a car loan that he pays toward.) He also does a lot of (healthy) investing and has a separate account for that as well.

He is much better than me in terms of financial planning and allocation of money.

[disneysteve]

When you need a car, will paying for it be entirely your responsibility or will that be handled jointly?

It's a bit hard for me to advise you here because I can't imagine sitting on 17K in a savings account while we pay 14-15% interest on loans that we could wipe out in an instant, but my wife and I handle our finances jointly, not individually.

[Jluke]

Based on recent info. Though I don’t think my suggestions will matter.

Payoff the entire credit card bill with “your money”.

Borrow money from your husband to payoff the personal loan and pay him back. Starting with whatever is leftover from your $2800 minus the credit card payoff.

I can understand the “lesson “ here but it is costing both of you dollars; despite the separation of monies.

I am interested to hear how the future car purchase will be handled.

Disclosure: this sounds similar to how my wife and I handle finances except she didn’t have any debt. So I can relate somewhat and the above is what I would have done to help us out.

Thanks for sharing your details. We really are trying to offer the best advice though it may seem we are being critical .

[disneysteve]

Borrow money from your husband to payoff the personal loan and pay him back.

That's an interesting idea. If he's okay with that, it would get you out of the high interest debt quickly. You could even pay him back the 1-1.5% interest he is getting on his savings account if he wants you to.

[Thrif-t]

Yes, last time I checked, there was approx $17,000 in his account. Again, we keep it separate because it is what works for us. We both contribute (he contributes more) to our joint bills, and we both pay our own bills/debts separately. (i.e. He has a car loan that he pays toward.) He also does a lot of (healthy) investing and has a separate account for that as well.

He is much better than me in terms of financial planning and allocation of money.

I know you want to keep everything separate and if that's what works for you fine, but just curious does your DH have student loans too? Just wondering about that 17k and if paying off our personal loan is the best use for it?

[Benderz]

Maybe I'm old fashioned but "from this day forward, for better, for worse, for richer, for poorer, in sickness and in health" The only good thing about keeping things separate in a marriage is it makes the divorce accounting easier

[kork13]

I agree wholeheartedly with DisneySteve, JLuke, and Thrift-t. If your husband is sitting on that much in savings, and you're drowning with interest rates between 5-15%, I strongly recommend doing whatever you can to work something out between you two to get your debts under control so that you can move forward.

I'm not a huge fan of the idea of having a husband loan his wife money... I feel like that would complicate/stress any close personal relationship, and most especially between husband/wife. But with that said, if that's what it takes for you to dig out from your debts, it would be worth it. Honestly, you could even offer to pay him interest at a rate higher than he's getting in the bank. If you paid him 3-4% interest, it would still "cost" you less than all of your present debts. (Really, since that "interest" would stay within your relationship, it is only of benefit to you both.)

You need to work as a couple to resolve your debt situation. Using both your savings and his savings to clear off at least the highest interest debts is the best option, however you two decide to make that work. But if you both can't agree to something like that, you should at least look into getting an unsecured debt consolidation loan from your bank. With a 770-ish credit score, you should be able to get a rate in the 6-8% range, which will be way better than getting decimated by 14% interest.

[AJSimon]

I think one spouse loaning the other money is an awful idea. For basically the same reasons one friend loaning another money is an awful idea. You're just inviting extra stress into the relationship.

Really, this all circles back to the idea that husband and wife really should be throwing in together, 100%, on financial matters. All the questions about which debt to pay off first and how, and what goals should be saved for - all those become clarified once they stop thinking about it like two people having two separate piles of cash and two separate piles of debt.

[bjl584]

It's a bit hard for me to advise you here because I can't imagine sitting on 17K in a savings account while we pay 14-15% interest on loans that we could wipe out in an instant, but my wife and I handle our finances jointly, not individually.

I couldn't imagine a husband sitting on $17K cash while his wife drowns in debt at a 15% interest rate.

OP said their situation works, but I don't see it as healthy.

[Thrif-t]

And people just don't get how compound interest with large sums of money works. It took me 22 years to save 100k in my 401k and only 6 years to save my 2nd 100k. You'll get further ahead faster if you pool your money, but a lot of people just don't get it.

Now I can see not combining your student loans with his those should stay in your name only. But I'd be working together as a couple to pay them off. It will benefit you both.

[breathemusic]

OP, you didn't ask for people to comment on how you and your partner have decided to handle joining vs not joining your finances. I frankly find people telling everyone else that a married couple should be expected to join everything really presumptuous. None of us know the details of your lives enough to make that sort of judgement, and frankly, my partner and I manage our finances the same way: A joint account for our shared expenses and separate accounts for the rest. We're not married yet, but even once we're married we'll do the same thing, and we're both great with money, so it's not even about 1 person being better with finances than the other.

I can understand wanting to deal with the consequences of your bad spending mistakes yourself. I think if you want to do that, it's fine and you'll just have to accept that you're going to be paying extra interest for a while. BUT, if you're comfortable asking your husband to "loan" you the money and you just pay him back, then I think that's a smart move too and 1 that I'd recommend.

Normally I'd say that you could see if you could get a good 0% interest for 18-24 months credit card offer to pay off the loan.... but given that credit card spending is what got you there in the first place, I'd only suggest that if you're SUPER confident that you could get the payoff done before the intro period ended and not overspend and end up doing exactly what you did with the loan and CC debt.

[cdorfish]

I do appreciate everyone's thoughts/opinions.

That was actually going to be another question, if that would be a better idea to borrow from DH and then pay him back.

The car would be paid out of my paycheck. I would keep the necessary amount to pay the loan every month and contribute what I can to our joint bills.

Another suggestion that was made to me elsewhere was to pay as much as I can towards the personal loan, pay the rest off in a matter of months, then open a 0% transfer CC and transfer my $1943 balance to it. What are your thoughts on that? (I'm not necessarily opposed, but my gut says not to do that.) But I'd like to hear your opinions.

Thank you again!

[cdorfish]

For some reason, the last couple posts didn’t show up on my computer when I posted my last reply at 5 pm today. I will respond to the rest when I get home.

[Jluke]

Keep it simple. Don’t try to get fancy with 0% cards.

Credit card 1945 balance with $350/month payment.

Pay it off today. It is a no brainer. You free up that $350/month.

Have you talked to your husband about using his money towards the personal loan? You would be able to pay him back with $350-400/month. That would be done in under a year or so.

If you don’t have the credit card paid off by end of this week I would suggest that you get a second job.

[cdorfish]

Hello everyone. I greatly appreciate all of your input.

I've moved my money to my checking account, just waiting for that to clear. I will have a total $3670 to throw at my loans. Once my transfer clears (should be tomorrow), I'm going to pay off the $1943 credit card.

I'm going to put the remaining balance ($1727) towards the $4617 personal loan, which will bring it down to $2890. I'm going to talk to DH tonight about him paying off the remainder of the loan. I will now give him the $500 that I was previously throwing at my debts, as well as my gas reimbursement check I get monthly. I'm also going to offer to pay the 4% interest as well. I should be pay able to pay him back in about 3 months.

I will let you all know how it goes.

Thank you.