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Using Savings to pay Credit Card Dept

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rsprec
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Using Savings to pay Credit Card Dept  Reply with quote  

Question first:
Based on my statements below is it wise to cash out one of my
ROTHS or something and pay down the Credit Cards
Then if disciplined I can make higher payments to the same ROTH
or works 401k or somewhere

$25,000 various Credit Card Dept

Now myself and wife have a few different savings going on
Wife ROTH
ME ROTH
Wife work 401K
ME work 401K
2-3 Stock investments with local broker
ME Good work Pention plan going

Anyway due to interest rate and other reasons the Credit Card
Dept just is not going down ( Been trying the last 3 years )

I believe some of it is due to to much savings for our income
I know can't ever save to much .. But just not able to get rid of
the Credit Card debt and just seeing it get worse
( Need house repairs and new ( used ) car pretty soon, trying to get
kids through college )
Our Cash ( bank ) savings is only about 2 months income ahead

Thanks
Post Wed Jul 02, 2014 2:46 am
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oldguy
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A couple questions first -

Did you cash out those VUL Policies a few yrs ago and get that money?
And did your daughter learn to drive the car w/ the stick shift? Very Happy

Yes, it might be a good plan to use money from the Roths to clear part (maybe half?) of the CC debt. I agree that you are trying to do too much with your income - cars, kids in college, house maintenance - it gets easier after the kids are thru school but you have a few yrs of struggle first.
Post Wed Jul 02, 2014 3:12 am
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rsprec
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No didn't cash anything out. Was trying to struggle through thinking we can do it.

Now have 2 kids in college another about to turn 16 .. So will soon have 5 drivers in household with currently 2 cars .. So things are just getting more and more expensive.

I'm looking forward to 5-6 years from now ( at least 2 kids out of house )and just need that plan to save more aggressively. On that what is nice my company allows to setup automatic incremental increases of the 401K savings plan .. I aready setup that up for 2% increases every 6 months.

Thanks
Post Wed Jul 02, 2014 10:41 am
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rsprec
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opps .. Car with stick finally broke down .. had 200,000+k on it .. So main reason another car is needed ... Yes she learned, not sure if she will ever want to get one herself though Smile
Post Wed Jul 02, 2014 10:43 am
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oldguy
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This is from Feb 2010 --

Life Policy: Value: $11,000.00 putting in $200.00 monthly
Life Policy: Value: $9,000.00 putting in $150.00 monthly

Since then you've paid in an extra $17,000. That's almost as much as the $20,000 face value of the death benefit, ie, you could have just put your $17,000 into a savings account and self-insured.

You have to ask yourself what the insurance is for. Most of us buy life ins to provide an income for our dependents in case we die early - enough to put them thru college and attain adulthood. To do this for 3 kids you need about $500,000. In other words, your $20,000 will barely pay for the funeral and then gone, almost useless.

You could get a $500,000 policy for 20 years for about $50/mon, way less than what you are now paying. The reason is obvious - everyone dies so 'whole life' ALWAYS has to pay. But with 'term life', most people don't die in that critical 25 to 60 range - so the company SELDOM has to pay. And that's why it is 10X cheaper.

Personally I would start by cashing out that $20,000 of insurance, using the cash value to pay debt, and then but a normal term policy - and start saving that extra $4000/yr that you are spending on insurance. Very Happy
Post Wed Jul 02, 2014 11:17 am
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rsprec
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Now I remember .. Yes sounds like that should be step 1 for us and maybe relook in another 3-6 months or so.

That maybe part of my issue is not Re-Looking at what is going on financially ofter enough. I should probably be on this post weekly just to see what is going on elsewhere .. lots of good stuff.
Post Wed Jul 02, 2014 11:35 am
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hivilanmard
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A credit card is a payment card issued to users as a system of payment. It allows the cardholder to pay for goods and services based on the holder's promise to pay for them. Credit cards can be a great financial tool, if they are used wisely. But they also can quickly get you into financial trouble if used carelessly





Prepaid Card Programme
Post Wed Sep 10, 2014 9:58 am
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littleroc02us
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quote:
Originally posted by hivilanmard
A credit card is a payment card issued to users as a system of payment. It allows the cardholder to pay for goods and services based on the holder's promise to pay for them. Credit cards can be a great financial tool, if they are used wisely. But they also can quickly get you into financial trouble if used carelessly





Prepaid Card Programme


Thanks for the education on credit cards, but how does this response contribute to the conversation in this thread?

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Fri Sep 12, 2014 3:39 am
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