Between my wife and me, we’re sitting on 45k in credit card debt. I just got a new job making 175k a year (previously, I was making 68k until a few months ago), and my wife makes around 125k. So we’re now at a combined 300k per year.
I’m looking for a good app or website where I can plug in all of our bills and income, and it’ll help with setting a budget to tackle our debt.
Also, should we consider borrowing from my wife’s 401k to pay down some of this? Any other ideas to help pay it off faster or reduce interest? I’ve got three credit cards with APRs of 29%, 27%, and 17%.
Spencer said:
With a combined 25k a month, and still struggling with 45k? If you cut back, you could clear that debt in 3 months and still be comfortable.
We bring home about 15k a month after taxes. Between rent (4k, pricey city), kid expenses, bills, student loans, etc. But yeah, I think setting aside 5k each month to hit the cards would work.
@Jin
I take home less than 1k a month after expenses, with a similar debt amount. If I could put 10k toward debt each month and live on 5k? I’d be thrilled.
Check your credit card statements. Each one should show what the balance would be if you’re just paying minimums over time vs. paying more each month to clear it in 3 years. I use an Excel sheet to track all my expenses and see where I can cut back each month. Pick either the lowest balance or the highest APR card first, then knock that one out. It’s a good way to start.
With that income, you could clear 45k in under a year if you stick to a budget. Earning more makes it easy to spend more, so just watch for that. It depends on what your costs are, but 45k is a lot to rack up even on your past income of 200k combined.
If your wife’s job is steady, a loan against her 401k might not be a bad option. It could get everything into one payment at a lower interest rate, but make sure you stop using the credit cards. Some folks consolidate debt and then run up the cards again.