rock_marmot3 wrote:Debt: total of $225k
- Home equity loan: $75k @ 4%, paying interest only
- Mortgage: $90k @ 4.875%, on track to pay off in Aug '18
- Student loan: $42k @ 6%, paying mostly just interest
- Credit card: $18k @ 6% paying mostly just interest
If she is paying interest only on the debt, doesn't she know that doing that, means the principal will never be paid off? Does she plan to keep paying this interest until she dies? Or is she interested in paying off the debt? (Only she can answer that.)
However, her history of only paying the minimum (ie, interest only) may make it difficult to change her ways. The other comment about her always having been in debt is worriesome. I wouldn't use her savings to pay off the debt, since I'll bet she just gets back into debt, and then her savings would be gone. She needs to figure out what SHE wants to do.
Does she have any idea what a budget looks like? You could have her estimate what she thinks she spends in each category. Then at the end of the year, take her checkbook register and line up the checks against each category for each month. This could be an eye opener to her to see where she spends her money.