DarkDewEssence
New Member
I always feel like I need to give a little background on how I ended up here… being in this group is my backstory.
We’re dealing with a few big credit card balances (ranging from $11k to $27k) and a loan from a 401K. After talking itt over, my partner took out a personal loan to basically shuffle things around—and to his credit, our card rates were over 20%, and this loan is about 10%.
I just finished reading Get the Hell Out of Debt by Erin Skye Kelly (highly recommend! It was refreshing to read something by a woman, for women).
Here’s my question for everyone…
Right now we have $38,000 in savings (from that personal loan and our tax returns).
Card 1: $11,000 at 0% interest for 3 more months
Card 2: $27,000 around 20%
Card 3: $25,000 around 20%
401K Loan: $9,000
Personal Loan: $26,000 around 10%
His paycheck has $230 taken out each time to cover the 401K loan.
My thinking is:
Step 1: Set aside $6,000 of our savings as an emergency fund (about two paychecks).
Step 2: Pay off the 401K loan so we can stop that $230 deduction and get that money back.
Step 3: Pay down Card 3, leaving about $2,000 on it.
He’s unsure about paying off the 401K loan because he says we’re “not losing money on it” since the interest goes back to him (I really need help wrapping my head around this).
He wants to pay off the $11,000 card before it starts charging interest.
So… I’m curious what you all would do and why?
Oh, and besides our mortgage, this is all our debt. We own both our cars outright.
We’re dealing with a few big credit card balances (ranging from $11k to $27k) and a loan from a 401K. After talking itt over, my partner took out a personal loan to basically shuffle things around—and to his credit, our card rates were over 20%, and this loan is about 10%.
I just finished reading Get the Hell Out of Debt by Erin Skye Kelly (highly recommend! It was refreshing to read something by a woman, for women).
Here’s my question for everyone…
Right now we have $38,000 in savings (from that personal loan and our tax returns).
Card 1: $11,000 at 0% interest for 3 more months
Card 2: $27,000 around 20%
Card 3: $25,000 around 20%
401K Loan: $9,000
Personal Loan: $26,000 around 10%
His paycheck has $230 taken out each time to cover the 401K loan.
My thinking is:
Step 1: Set aside $6,000 of our savings as an emergency fund (about two paychecks).
Step 2: Pay off the 401K loan so we can stop that $230 deduction and get that money back.
Step 3: Pay down Card 3, leaving about $2,000 on it.
He’s unsure about paying off the 401K loan because he says we’re “not losing money on it” since the interest goes back to him (I really need help wrapping my head around this).
He wants to pay off the $11,000 card before it starts charging interest.
So… I’m curious what you all would do and why?
Oh, and besides our mortgage, this is all our debt. We own both our cars outright.
