| Making headway but need advice |
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mattc
New Poster
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Joined: 31 Jul 2005
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| Making headway but need advice |
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Hello all. A recent job promotion has given me the opportunity to have an extra $600 per month. I have already established direct deposit to my Roth and been paying up on my credit cards (highest rate first).
I still have considerable debt ($34k), no emergency fund and do not have investments other than retirement. I have an ING account and the 403b does not have any matching until 2years (i've been there less than 1).
Any suggestions as to where to put my extra cashflow as well as long term strategies about my money?
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Sun Jul 31, 2005 4:52 pm |
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PFFrank
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Joined: 22 Jul 2005
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| Re: Making headway but need advice |
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quote:
Originally posted by mattc
Hello all. A recent job promotion has given me the opportunity to have an extra $600 per month. I have already established direct deposit to my Roth and been paying up on my credit cards (highest rate first).
I still have considerable debt ($34k), no emergency fund and do not have investments other than retirement. I have an ING account and the 403b does not have any matching until 2years (i've been there less than 1).
Any suggestions as to where to put my extra cashflow as well as long term strategies about my money?
Without knowing the details of the $34k of debt, it's tough to give advice. My initial reaction would be to pay down the debt first, but that could change depending on what kind of debt it is.
PFFrank.com
Personal Finance, Frankly Speaking
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Mon Aug 01, 2005 3:39 am |
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IdahoSpud
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First of all, congratulations on your increased income! You must certainly find an extra $600/month welcome 
You are on the right track by paying off debt, highest interest rates first.
You might want to consider transferring the credit card debt to other cards with low 'teaser' rates, thereby reducing the accrued interest so you can pay them off even faster.
The interest they'll charge you on $34k of debt won't be low. You'll want to get out from under that as soon as you can. On the other hand, bear in mind that money in an emergency fund will pay you almost zero interest, courtesy of Easy Al and the vast amount of money they've printed lately.
I don't know if it's necessary to have *all* debt paid off before starting an emergency fund, but personally I'd want my debt well under 5 figures before even considering savings... there's little point if debt is out of control. But that's me. You need to decide for yourself. Best wishes!
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Tue Aug 02, 2005 11:48 am |
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ssi1111
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If it is a credit card or any other high interest debt, I would definitely pay it off first. You can always use your credit card for emergency, so you don't really need an Emergency Fund. You are probably paying close to $200 on finance charges every month... that's my guess.
Check out http://www.expenseregister.com
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Tue Aug 02, 2005 2:12 pm |
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sayyes
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Location: Newport, RI
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Hello mattc,
If the 34K is credit card debt, then I concur with the other posters here that you need to pay that down first.
More likely, however, it is a mix of credit cards, car loans, student loans, etc. If this is the case, I would check out a site I created that will show you the difference between good debt and bad debt and explain what you need to do to get on the right track financially. It will also address your question about you should do with this money for the long-term.
http://www.ManageYourDollars.com
I hope this helps!
Money Blog | Financial Goals Explained | Bargains Online | Refinance
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Tue Aug 02, 2005 5:52 pm |
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mattc
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thanks to all the contributors. The $34k is, sadly, credit card debt. I own my cars and paid off student loans before I got into this situation. It's just difficult because I can see the progress with the highest interest rate, but I have maybe 1 1/2 paychecks in savings. The lack of savings really worries but so does the debt load.
thanks, mtt_c
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Wed Aug 10, 2005 5:04 am |
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Lambert
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quote:
Originally posted by mattc
thanks to all the contributors. The $34k is, sadly, credit card debt. I own my cars and paid off student loans before I got into this situation. It's just difficult because I can see the progress with the highest interest rate, but I have maybe 1 1/2 paychecks in savings. The lack of savings really worries but so does the debt load.
thanks, mtt_c
If I woke up in your shoes tomorrow, I'd take the first couple of months pay minimums on everything and save all surplus cash, just to get a small buffer incase of smaller emergencies such as car repairs, unforseen expenses, outlandish electric bills, etc.
I know many think using a CC as emergency net is ok, and it can be useful short term in a pinch but long term really all you do is pile on more debt. Get you a small buffer of at least 1 grand and then start throwing every spare penny you can find at your debt.
Even if you just started putting the new increase towards the debt and lived as you had been previously, you'll have it gone in about 5 years. Find some extra cash to add to that.
You say you have 2 paid off cars. I would be looking into down grading a car or even learning to survive on 1 if possible just for now. Selling a car could put a big dent into that debt.
If you are like me and most other people, you likely have thousands in assets laying around the house you either don't use or could live without. CDs, Movies, spare furniture, appliances you rarely use, the grill you thought you needed but used once and now collects dust on the patio, that sweet stereo that you never have time to listen to anymore .... anything you could sell to gather up some cash. garage sale, ebay and pawn shops.
Just some ideas to mull over with the rest of those provided by the others..
Congrats on the new income and kudos on the paid off cars and student loans. You'll make it through this one ok too. Just stay focused.
Good day and God bless.
marC
Because the Law of Gravity Doesn't Apply to Credit Card Balances!
www.ExperiencingFreedom.com
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Tue Aug 30, 2005 8:27 pm |
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angelface
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yep the best thing to do would be to pay down the debt!
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Tue Aug 30, 2005 11:47 pm |
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