Attempting To Be Debt Free

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Topic Author
ygman
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Attempting To Be Debt Free

Post by ygman » Sun Feb 10, 2019 12:42 pm

Hello everyone,

I am a 38 years old male, divorced and deep in debt. My younger self made a lot of mistakes and I am learning from these mistakes everyday. Growing up, I have no financial education and no one to learn from but I want to change that for my children. By the time my divorce finalized two years ago, I have approximately $65,000 in student, auto, personal loans and credit cards debts. Past few years have been very depressing - not seeing my kids daily took a toll on me. I never consider bankruptcy, like the Lannisters (lol), I want to always pay my debts. Today, I have about $45,000 left. Six months ago, I started doing some research because I could not stare at this monster anymore. I landed on bogleheads.org and set it as my homepage and been a reader since. My interests were personal finance and investing - subjects I was clueless about for a longtime. Did not start 401K until four years ago (wasted six years of company match), still did not have a clue, it was just signing up and contribute 1%.

Today, I come to you seeking your advice. My ultimate goal is to be debt free before or at the time I reach 40. The retirement investment train is leaving me behind, it seems. Below is a breakdown of my income and debts. I do not think I have the right approach to reach my goal.

Income:
Regular job: S76,000 (expecting 3% to 7% increase later this year)
Side jobs: ~$5,000 - $10,000 (two side jobs, plan to stop both in few months)

Investment (through Fidelity):
401K: $14,000 (contribute 6%, employer matches 50%)
Roth: $125 (started to contribute $50 a month by setting up automatic withdraw from my bank)
Taxable: ~$6,000 (about $4000 is employer stocks, also contributing $50 monthly through paycheck deduction and $50 automatic from my checking account to buy ITOT)

Cash:
Bank 1: Money Market Saving - $11,000 - earning 2% interest (set as my emergency fund and contributing $100 a month)
Bank 2: Saving - $800

Child Support: $1,600 monthly

All Debts:
Credit card: $3,000 (0% for next eight months, Chase and Discover, pay $200 a month)
Personal Loan 1: 15,600 at 10% (five years left on seven years term, pay $332 a month)
Personal Loan 2: 9,900 at 10% (three years left on five years term, pay $318 a month)
Students Loan: $10,400 at 3.5% (five years left, initial amount was $26,500 and been making payment for 13 years, pay $200 a month)
Auto Loan: $7,000 at 4.95 (two years left on four years term, pay $271 a month)

Total monthly payments toward debts is $1,200.

Other payments including rent, utilities, fuel, food, etc...: ~$1,500


Here is what I have in mind:
-Pay off the credit cards within 4 to 5 months, currently making $200 monthly payment, use the saving in Bank 2 to pay them off
-Use $10,000 of the emergency fund to pay off Personal Loan 2
-Use the debt avalanche to go after Personal Loan 1 and then attack Auto and Student loans
-Stop the combined $200 in Roth and Taxable and Emergency fund contributions and have that goes to the avalanche

What do you think? Is there anything else you would change if you were in my situation?

Thank you in advance. I'm ready to answer any follow-up questions or clarifying things if needed.

KyleAAA
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Re: Attempting To Be Debt Free

Post by KyleAAA » Sun Feb 10, 2019 1:02 pm

Pay off debt from highest interest rate to lowest. Keep contributing enough to 401k to get the match. You might consider at least talking to a bankruptcy attorney although your debt load doesn’t seem unmanageable. Your student loan interest rate is low enough that I wouldn’t pay it off early, I’d concentrate on saving for retirement instead. Ditto for the auto loan, which in any event only has 2 years left. Clobber the 10% loans and credit card debt ASAP.
Last edited by KyleAAA on Sun Feb 10, 2019 1:06 pm, edited 5 times in total.

mortfree
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Re: Attempting To Be Debt Free

Post by mortfree » Sun Feb 10, 2019 1:03 pm

I agree to focus on the credit cards and personal loans as you mentioned.

I would regroup after they are gone and see where you stand. Maybe you need to increase cash savings at that point or direct more to retirement.

I would (emphasis being I) pay the auto loan on its normal schedule. If all the above is accomplished then this would be considered leveraging IMO. The interest will be minimal because of the low (compared to student loans) balance.

mnvalue
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Re: Attempting To Be Debt Free

Post by mnvalue » Sun Feb 10, 2019 1:08 pm

Your debt payoff plan seems solid, though I agree with the others that you should invest rather than pay early on the low interest loans.

I would sell the employer stock in any event. You could either contribute that to the Roth (before April 15th as a 2018 contribution first up to the limit and then the rest as 2019) or use it for debt payoff.

Likewise for the rest of the taxable account. There is no reason you should be investing in taxable when you haven’t maxed out Roth and 401k space first.

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CAsage
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Re: Attempting To Be Debt Free

Post by CAsage » Sun Feb 10, 2019 1:15 pm

I would totally keep up the 401k (you want to get the maximum your employer matches), then the Roth, and in your shoes I would skip the taxable investments for now. Sell those and dump the money on your debt - in order of interest. Hopefully those personal loans are simple interest, so you can pay them off faster? Credit cards before the rates go up (so, in full soon), and student loans last. Depending on how stable your employment is and how quickly you could find another job, your emergency fund is a good thing. Browse savings rates at depositaccounts.com to ensure you are getting the best you can there. You still have a lot of years to catch up, good luck.
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HomeStretch
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Re: Attempting To Be Debt Free

Post by HomeStretch » Sun Feb 10, 2019 1:18 pm

Your plan is good. Since it’s a multi-year plan, I would:
1. Sell the employer stock in taxable account now to reduce debt before using the emergency fund
2. Reduce, but not eliminate, the emergency fund as 2+ years is a long time to go without liquid emergency funds. In the event of a job loss, you want to be able to pay child support until you get another job to avoid putting your family thru a financial emergency.
3. Pay the monthly minimums on the 0% cards and pay off with savings/EF in 6 months before the rate goes up.
4. Don’t quit the side jobs in a couple months. Keep working extra until debt is paid off.

Good luck, keep making progress in paying down the debt!

02nz
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Re: Attempting To Be Debt Free

Post by 02nz » Sun Feb 10, 2019 1:26 pm

Agree with others that you should not be investing in taxable before you've maxed out tax-advantaged space. Sell everything in taxable and put it toward your debt; as it is you're basically paying 10% interest to invest in taxable. And holding employer stock is always a bad idea (not talking about stock options here). A lot of your livelihood already depends on one company, so you should not magnify that risk by also holding their stock. We generally don't even recommend buying single company stocks that aren't your employer, because of the concentration of risk.

I recommend you list the available funds and expense ratios from your 401k. Assuming your 401k does not have high fees or expensive funds, I'd max that out (I mean $19K a year, not just enough to max the employer match) before you put a cent into a Roth IRA. You're in the 22% federal income tax bracket. At that rate, and particularly given that you're basically at zero for retirement savings, you should absolutely defer taxes. In retirement you can withdraw this money at far lower tax rates. (As an example, currently a single person can withdraw about $50K every year out of tax-deferred 401k/traditional IRA balances and pay around 9% in federal tax; even if tax rates go up, you'll still be paying far less than 22%, because every year you "fill up" your standard deduction and lower tax brackets).

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Watty
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Re: Attempting To Be Debt Free

Post by Watty » Sun Feb 10, 2019 1:44 pm

I agree with selling off the employer stock.

I would keep up the 401k contributions to get the employer match which is a 50% return which is much better than any of the interest rates on your other debt.
ygman wrote:
Sun Feb 10, 2019 12:42 pm
Auto Loan: $7,000 at 4.95 (two years left on four years term, pay $271 a month)
If the car is worth significantly more than $7,000 then I would take a look at refinancing the car loan for as much as they will loan you at a low interest rate to use any extra money to pay down some of the other high interest rate debt.
ygman wrote:
Sun Feb 10, 2019 12:42 pm
-Use $10,000 of the emergency fund to pay off Personal Loan 2
With your child support your monthly expenses look like they are around $5,000 a month. With the taxable account that would leave you with less than two months expenses which is cutting it too close.

The big risk is that you are making good progress now but if you run into a problem and don't have an adequate emergency fund then you could end up with even more expensive credit card debt and that could derail you. If you sold off your taxable investments, including the company stock, then you could use some of that to pay down the high interest debt.

mbasherp
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Re: Attempting To Be Debt Free

Post by mbasherp » Sun Feb 10, 2019 2:47 pm

This is definitely possible. I'd like to point out that you have two categories of debt: really bad, get rid of it immediately debt, and not much of a problem debt.

I would:
- Keep ~$10k in your emergency fund because you have family obligations. Use an online bank to get 2%+ interest.
-Put all extra cash from savings and the entire taxable account to personal loan #2 asap.
-Stop the Roth IRA until your credit cards and 10% loans are gone, but keep the 401k as is.
-Pay off the personal loans as quickly as possible, and also hit the credit cards before the 0% rate expires.

The good news is that it won't take you all that long to get to the point where you only have the car loan and student loans remaining. Then:
-Contribute more to 401k and start the Roth IRA back up again (need to start gaining ground on retirement savings)
-Pay off car loan early
-Pay off student loans either on time or early. It's important to balance a desire to be debt free with the right choices for your future. You have two issues right now (debt+low assets) and you need to address both in a responsible manner.

Best of luck! I am sure that you'll be through this before long. I went through something similar years ago and the process of fixing my problems has set me on a superior financial path ever since.

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Sandtrap
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Re: Attempting To Be Debt Free

Post by Sandtrap » Sun Feb 10, 2019 2:51 pm

Great suggestions so far.
Why do you plan to drop the extra income from the side jobs?

Topic Author
ygman
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Re: Attempting To Be Debt Free

Post by ygman » Sun Feb 10, 2019 2:59 pm

Thank you all, great information and I really appreciate your responses.

All the debts have fixed rate, saved .25% interest on 3 of them with auto payments.

With the emergency fund, it was a risk I was willing to take, thinking after all debts paid, I can easily build it back. But anything can happen within that two years period, so I will reconsider and maybe build it to $12,000 and then leave it there.

My regular job is stable, been working at the same company for 10 years. My employer matches 50% up to 6% of my income. If I have a 3% raise or promotion this year, I may increase the 401K contribution by 1 or 2%.

Instead of leaving both side jobs, I will leave one because I want to spend more time with my kids. I can do one side job weekday (evening and night) and put that money toward debts. Then spend the weekends with the kids, they under 10.

I will stop contributing to the taxable and Roth account until debt free. As others have suggested, use it to start paying down debts.

The car worth about $4,000.

If I continue to pay the minimums on personal loans, I will have about $6,500 in interest paid. I hope to cut that by half. So I'll make these two a priority.

Topic Author
ygman
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Re: Attempting To Be Debt Free

Post by ygman » Sun Feb 10, 2019 3:23 pm

mbasherp wrote:
Sun Feb 10, 2019 2:47 pm
This is definitely possible. I'd like to point out that you have two categories of debt: really bad, get rid of it immediately debt, and not much of a problem debt.

I would:
- Keep ~$10k in your emergency fund because you have family obligations. Use an online bank to get 2%+ interest.
-Put all extra cash from savings and the entire taxable account to personal loan #2 asap.
-Stop the Roth IRA until your credit cards and 10% loans are gone, but keep the 401k as is.
-Pay off the personal loans as quickly as possible, and also hit the credit cards before the 0% rate expires.

The good news is that it won't take you all that long to get to the point where you only have the car loan and student loans remaining. Then:
-Contribute more to 401k and start the Roth IRA back up again (need to start gaining ground on retirement savings)
-Pay off car loan early
-Pay off student loans either on time or early. It's important to balance a desire to be debt free with the right choices for your future. You have two issues right now (debt+low assets) and you need to address both in a responsible manner.

Best of luck! I am sure that you'll be through this before long. I went through something similar years ago and the process of fixing my problems has set me on a superior financial path ever since.
Thank you, will definitely go that route.

I use Capital One 360 for the Money Market Saving, earning 2% on interest. Thought about switching to Ally but I don't think the extra .20% worth it. Plus I've been with Capital One (formerly ING Direct) for many years.

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5th_Dimension
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Re: Attempting To Be Debt Free

Post by 5th_Dimension » Sun Feb 10, 2019 3:24 pm

ygman wrote:
Sun Feb 10, 2019 2:59 pm
With the emergency fund, it was a risk I was willing to take, thinking after all debts paid, I can easily build it back. But anything can happen within that two years period, so I will reconsider and maybe build it to $12,000 and then leave it there.
I took this risk when I was 40 and $44,000 in debt. Rather than build up an emergency fund I put all my extra money toward the debt. I figured at worst if something happened I could put an expense back on the cards. It was a roll of the dice and it paid off for me, however I don't have kids so that is a consideration. It took me 4 years to get out of the debt so don't be discouraged if it comes a little slower than you expect. The plan you have and the advise you are getting here will get you there eventually.

I am now 59 and have net worth of around $800,000. Some of that came from an inheritance so I had some help, but because of Bogleheads I was able to make good financial decisions and I am worlds better than I would have been had I not found this community.

You are on the right path. Stay on it and you will be fine.

Good luck.
"My idea of rich is ordering the most expensive thing at Denny's"

Topic Author
ygman
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Re: Attempting To Be Debt Free

Post by ygman » Sun Feb 10, 2019 9:12 pm

5th_Dimension wrote:
Sun Feb 10, 2019 3:24 pm
ygman wrote:
Sun Feb 10, 2019 2:59 pm
With the emergency fund, it was a risk I was willing to take, thinking after all debts paid, I can easily build it back. But anything can happen within that two years period, so I will reconsider and maybe build it to $12,000 and then leave it there.
I took this risk when I was 40 and $44,000 in debt. Rather than build up an emergency fund I put all my extra money toward the debt. I figured at worst if something happened I could put an expense back on the cards. It was a roll of the dice and it paid off for me, however I don't have kids so that is a consideration. It took me 4 years to get out of the debt so don't be discouraged if it comes a little slower than you expect. The plan you have and the advise you are getting here will get you there eventually.

I am now 59 and have net worth of around $800,000. Some of that came from an inheritance so I had some help, but because of Bogleheads I was able to make good financial decisions and I am worlds better than I would have been had I not found this community.

You are on the right path. Stay on it and you will be fine.

Good luck.
Thank you for the encouragement. I will update you guys on my progress in 3 months. I'm hopeful.

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Re: Attempting To Be Debt Free

Post by JGoneRiding » Mon Feb 11, 2019 11:42 am

That is NOT the debt pay off plan I would do.

I would stop the contributions to the Roth taxable and ef. But I would direct that $200 at the loan2.

For the 2 credit cards at 0% u would simple figure out how much you need to pay to be done before the rate reset and pay that much (I get 375 per month) I would just find this money out of the regular budget while directing $200/month extra towards loan 2.

When the credit card is gone I would then direct everything to loan 2. My back of the envelope math says you can do it in less than 18 months. Then repeat for loan 1.

I would push yourself to get loans done faster then you think. So they to get loan 2 done in less than a year. Find extra money etc.

The student loan I would when the others are gone just set to some extra amount and at that point focus in retirement

Edit: forgot my original point. I would NOT empty the ef. You have kids. It would be better to have that money then re use the cards. Trust me I 100% understand I have been in the debt shoes but using the credit card as an ef is not good. I would stop contributing to it.

catfish48084
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Re: Attempting To Be Debt Free

Post by catfish48084 » Mon Feb 11, 2019 12:40 pm

Congratulations for your resolve to get your financial house in order. When I got out of debt 20 years ago it was the greatest feeling in the world, and you too will experience that. Once the debt is gone you will be energized and the wealth building can accelerate. You are on your way.

You might get some good advise on debt elimination by reading Dave Ramsey, who is a well know guru having followers with amazing results. Good luck to you.

Thesaints
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Re: Attempting To Be Debt Free

Post by Thesaints » Mon Feb 11, 2019 12:44 pm

Why are you repaying a 0% interest debt, while you have some at 10% ?
In fact, why are you investing at all (other than to get you employer match) ?
Invest as much as you get 100% of matching contributions and then repay the 10% debt. You won't find any investment around that gives you an expected return of 10% after taxes.

bloom2708
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Re: Attempting To Be Debt Free

Post by bloom2708 » Mon Feb 11, 2019 12:56 pm

I would "Dave Ramsey" this debt.

If you really want to be done, stop the 401k/Roth/Taxable contributions. Sell taxable. Use all of your Emergency Fund except $1,000 or $2,000 dollars.

"The Total Money Makeover" book details Dave's plan. It works because all (all) of your focus is on the debt. A debt emergency.

You set aside $1,000. Everything else liquid (taxable and Emergency fund) pays off the debts smallest to largest. Not by rate.

You could knock off the credit cards (stop using) and the $7k car loan and a chunk of the $9k personal loan this week. That frees up $470/month from two paid off debts. Everything goes into the balance of the $9k personal loan until it is gone. Then $332 more is freed up to whack on the student loans. $470 + $332 + $1,200 all to the student loans. Once paid, you have $200 more to toss at personal loan 2. $470+$332 + $1,200 + $200.

The loans "snowball" meaning you gain momentum. Side job income. Toss that on.

This method is popular because it works (if you really want to kill the debt). Now, you could start doing the if/but/what strategy. Well, student loans are good and should be paid last. Car loan rate is lower than personal rate, should be last. That doesn't matter because this is going to take 18 to 24 months and then all of them will be gone. Interest won't make the difference. Finishing each debt will make the difference.

People here don't like Dave Ramsey for his investing advice. I get that. His get out of debt strategy works and the amounts you have, it works quite well.

It feels "tight" with a $1,000 Emergency Fund because it is supposed to feel urgent. Very urgent. Once the debts are gone, now you have all those payments to go to rebuild the Emergency Fund. Then start back with pre-tax 401k, Roth. Taxable should only be used once you max pre-tax 401k and Roth IRA. No reason to do taxable until you are using all your tax advantaged space up. Match in 401k does not count toward the $19k max for 2019.

Another option to consider. Good luck!
"A Stoic believes they don’t control the world around them, only how they respond--and that they must always respond with courage, temperance, wisdom, and justice." --Daily Stoic

Thesaints
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Re: Attempting To Be Debt Free

Post by Thesaints » Mon Feb 11, 2019 1:26 pm

bloom2708 wrote:
Mon Feb 11, 2019 12:56 pm
Everything else liquid (taxable and Emergency fund) pays off the debts smallest to largest. Not by rate.
Why would anyone do such a thing ??

JGoneRiding
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Re: Attempting To Be Debt Free

Post by JGoneRiding » Mon Feb 11, 2019 1:33 pm

Thesaints wrote:
Mon Feb 11, 2019 1:26 pm
bloom2708 wrote:
Mon Feb 11, 2019 12:56 pm
Everything else liquid (taxable and Emergency fund) pays off the debts smallest to largest. Not by rate.
Why would anyone do such a thing ??
There is thought to be some psychological benefit to such an approach. In OP situation it is bad advice.

The car loan will take care of itself. Pay as planned on automatic and don't even think about it.

Set the credit cards to be auto done by loan reset date and remove from thought (this means not using them at ALL, if necessary get a third card for daily stuff paid monthly).

Focus intensely with every spare penny and thought at the personal loan with the smaller balance. Make it a game, pay as many times a month as you can. Then repeat for the other. By the time those 2 are finished the car will be done and you can focus on increased retirement and the student loan. OP will be fine!

onourway
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Re: Attempting To Be Debt Free

Post by onourway » Mon Feb 11, 2019 1:34 pm

Thesaints wrote:
Mon Feb 11, 2019 1:26 pm
bloom2708 wrote:
Mon Feb 11, 2019 12:56 pm
Everything else liquid (taxable and Emergency fund) pays off the debts smallest to largest. Not by rate.
Why would anyone do such a thing ??
It was stated elsewhere in the post. Because if this emergency is treated seriously, the debts will all be gone in a couple of years. Interest rates will have a very minimal impact on this.

What went un-said is that all finance has a significant behavioral element. Perhaps debt all the more so. Paying off a debt entirely and now having more cash to put towards the remaining debts builds confidence and allows one to see progress more quickly. Nothing is optimal about having to pay back a bunch of debt. So focusing on the strategy that minimizes cost can end up ultimately inferior if one loses steam due to a feeling of making no headway, and has a relapse.

Thesaints
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Re: Attempting To Be Debt Free

Post by Thesaints » Mon Feb 11, 2019 1:39 pm

onourway wrote:
Mon Feb 11, 2019 1:34 pm
Thesaints wrote:
Mon Feb 11, 2019 1:26 pm
bloom2708 wrote:
Mon Feb 11, 2019 12:56 pm
Everything else liquid (taxable and Emergency fund) pays off the debts smallest to largest. Not by rate.
Why would anyone do such a thing ??
It was stated elsewhere in the post. Because if this emergency is treated seriously, the debts will all be gone in a couple of years. Interest rates will have a very minimal impact on this.

What went un-said is that all finance has a significant behavioral element. Perhaps debt all the more so. Paying off a debt entirely and now having more cash to put towards the remaining debts builds confidence and allows one to see progress more quickly. Nothing is optimal about having to pay back a bunch of debt. So focusing on the strategy that minimizes cost can end up ultimately inferior if one loses steam due to a feeling of making no headway, and has a relapse.
Better to change one’s behavior and start making financial decisions that make sense. In the OP case the advice to repay the 0% debt first “because it is small and will disappear” doesn’t even begin to be wrong. He has to pay the 10% debt first, and if he needs moral support just calculate his total net worth at the end of each month and see it go up will suffice.
Last edited by Thesaints on Mon Feb 11, 2019 1:39 pm, edited 1 time in total.

KyleAAA
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Re: Attempting To Be Debt Free

Post by KyleAAA » Mon Feb 11, 2019 1:39 pm

onourway wrote:
Mon Feb 11, 2019 1:34 pm
Thesaints wrote:
Mon Feb 11, 2019 1:26 pm
bloom2708 wrote:
Mon Feb 11, 2019 12:56 pm
Everything else liquid (taxable and Emergency fund) pays off the debts smallest to largest. Not by rate.
Why would anyone do such a thing ??
It was stated elsewhere in the post. Because if this emergency is treated seriously, the debts will all be gone in a couple of years. Interest rates will have a very minimal impact on this.

What went un-said is that all finance has a significant behavioral element. Perhaps debt all the more so. Paying off a debt entirely and now having more cash to put towards the remaining debts builds confidence and allows one to see progress more quickly. Nothing is optimal about having to pay back a bunch of debt. So focusing on the strategy that minimizes cost can end up ultimately inferior if one loses steam due to a feeling of making no headway, and has a relapse.
There are a lot of qualifiers here. "Can." "May be." "If." Sure, Ramsey's method does work if you stick to it, but the same can be said of every debt-reduction method and there isn't much solid evidence that Ramsey's method is superior in that regard. Just flip a coin and get on with it.

onourway
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Re: Attempting To Be Debt Free

Post by onourway » Mon Feb 11, 2019 1:47 pm

Thesaints wrote:
Mon Feb 11, 2019 1:39 pm

Better to change one’s behavior and start making financial decisions that make sense. In the OP case the advice to repay the 0% debt first “because it is small and will disappear” doesn’t even begin to be wrong. He has to pay the 10% debt first, and if he needs moral support just calculate his total net worth at the end of each month and see it go up will suffice.
I have no dog in this fight one way or the other as I've never been in this position. However the fact that a large number of people on many financial boards report success in actually pulling themselves out of debt using his methods should give some considerable weight to the decision.

It's easy to sit here from the relatively secure position most of us are in on this board with high net worth, secure jobs, and little or no debt and tell people to simply 'change their behavior.' In reality, that's not particularly helpful to someone who is deep in it. A few hundred or even a few thousand dollars of interest isn't going to make a material difference to someone in debt at this level. They need a strategy they can stick with. Which is likely a different strategy than an Econ like you or I would choose. :wink:

bloom2708
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Re: Attempting To Be Debt Free

Post by bloom2708 » Mon Feb 11, 2019 1:54 pm

Thesaints wrote:
Mon Feb 11, 2019 1:26 pm
bloom2708 wrote:
Mon Feb 11, 2019 12:56 pm
Everything else liquid (taxable and Emergency fund) pays off the debts smallest to largest. Not by rate.
Why would anyone do such a thing ??
Progress. By weeks end he could have 2 debts gone and 1/2 of another. Progress = confidence to continue.

It isn't my plan. Normal might work too, but normal didn't get to this point. As mentioned, it is just one alternative. To say it is more wrong than another plan is more opinion.
"A Stoic believes they don’t control the world around them, only how they respond--and that they must always respond with courage, temperance, wisdom, and justice." --Daily Stoic

Thesaints
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Re: Attempting To Be Debt Free

Post by Thesaints » Mon Feb 11, 2019 2:03 pm

onourway wrote:
Mon Feb 11, 2019 1:47 pm
However the fact that a large number of people on many financial boards ...
A large number of people do not make good financial choices. There can be no doubt about it, especially amongst BH-ers. Why all of sudden should we apply a majority rule to personal finance ?

The OP situation is far from tragic. Provided he takes advantage of his employer's matching contributions (a 50% return out of the gate) and uses all his other funds to cancel his horrible 10% interest debt (and the probably even more horrible CC debt, but only after his rate rests), he will be debt free and in a decent financial situation in a very short time. Furthermore, he would have learned a few basic rules of finance, such as comparing return rates and picking the most convenient one.

Thesaints
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Re: Attempting To Be Debt Free

Post by Thesaints » Mon Feb 11, 2019 2:04 pm

bloom2708 wrote:
Mon Feb 11, 2019 1:54 pm
As mentioned, it is just one alternative. To say it is more wrong than another plan is more opinion.
I'd say "basic math" a lot more than "an opinion".

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Re: Attempting To Be Debt Free

Post by Darth Xanadu » Mon Feb 11, 2019 2:10 pm

mbasherp wrote:
Sun Feb 10, 2019 2:47 pm

I would:
- Keep ~$10k in your emergency fund because you have family obligations. Use an online bank to get 2%+ interest.
-Put all extra cash from savings and the entire taxable account to personal loan #2 asap.
-Stop the Roth IRA until your credit cards and 10% loans are gone, but keep the 401k as is.
-Pay off the personal loans as quickly as possible, and also hit the credit cards before the 0% rate expires.
This is the best advice. Do not stop 401k contributions and/or drain your Emergency Fund as somebody earlier suggested.
"A courageous teacher, failure is."

Thesaints
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Re: Attempting To Be Debt Free

Post by Thesaints » Mon Feb 11, 2019 2:17 pm

Darth Xanadu wrote:
Mon Feb 11, 2019 2:10 pm
Do not stop 401k contributions
Which 401k investment will net the OP a 10% return, with reasonable certainty (his 10% interest payments on debt is absolutely certain) ?
He makes 80k/year, his debt is less than 50k. He will be out of it soon and with little consequences, provided he doesn't rush and doesn't make wrong decisions.

I feel like most on this thread are instead giving him the sort of emergency advice one would give to a junkie, just a shoot up away from OD.

McDougal
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Re: Attempting To Be Debt Free

Post by McDougal » Mon Feb 11, 2019 2:18 pm

Is there any way to renegotiate/refinance the personal loans? 10% is a big number, and even small relief here will go a long way.

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Darth Xanadu
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Re: Attempting To Be Debt Free

Post by Darth Xanadu » Mon Feb 11, 2019 2:19 pm

Thesaints wrote:
Mon Feb 11, 2019 2:17 pm
Darth Xanadu wrote:
Mon Feb 11, 2019 2:10 pm
Do not stop 401k contributions
Which 401k investment will net the OP a 10% return, with reasonable certainty (his 10% interest payments on debt is absolutely certain) ?
The one that results in a company match, which easily exceeds 10% interest on personal loan debt.
"A courageous teacher, failure is."

Thesaints
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Re: Attempting To Be Debt Free

Post by Thesaints » Mon Feb 11, 2019 2:21 pm

Darth Xanadu wrote:
Mon Feb 11, 2019 2:19 pm
The one that results in a company match, which easily exceeds 10% interest on personal loan debt.
As I wrote above, twice. Keep investing into 401k to the extent of getting the 50% match, not a dime more than that.

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Darth Xanadu
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Re: Attempting To Be Debt Free

Post by Darth Xanadu » Mon Feb 11, 2019 2:24 pm

Thesaints wrote:
Mon Feb 11, 2019 2:21 pm
Darth Xanadu wrote:
Mon Feb 11, 2019 2:19 pm
The one that results in a company match, which easily exceeds 10% interest on personal loan debt.
As I wrote above, twice. Keep investing into 401k to the extent of getting the 50% match, not a dime more than that.
Sorry, I inferred from your question that the OP should not continue to take advantage of company match, but it appears we are saying the same thing. Carry on :sharebeer
"A courageous teacher, failure is."

SQRT
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Re: Attempting To Be Debt Free

Post by SQRT » Mon Feb 11, 2019 2:24 pm

I can certainly identify with your predicament. I separated from wife #1 at 42 and was probably a little deeper in debt than you are. Can’t add much to what’s already been said except keep plugging away at the debt, Keep the best relationship you can with your kids, and always try to do the right thing by them. Try to put your best efforts into your job, as you really need it.

Just remember that things will get better and you have lots of time to “catch up”. Don’t be discouraged. Good luck.

theRemedy
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Re: Attempting To Be Debt Free

Post by theRemedy » Mon Feb 11, 2019 2:28 pm

bloom2708 wrote:
Mon Feb 11, 2019 12:56 pm
I would "Dave Ramsey" this debt.

If you really want to be done, stop the 401k/Roth/Taxable contributions. Sell taxable. Use all of your Emergency Fund except $1,000 or $2,000 dollars.

"The Total Money Makeover" book details Dave's plan. It works because all (all) of your focus is on the debt. A debt emergency.

You set aside $1,000. Everything else liquid (taxable and Emergency fund) pays off the debts smallest to largest. Not by rate.

You could knock off the credit cards (stop using) and the $7k car loan and a chunk of the $9k personal loan this week. That frees up $470/month from two paid off debts. Everything goes into the balance of the $9k personal loan until it is gone. Then $332 more is freed up to whack on the student loans. $470 + $332 + $1,200 all to the student loans. Once paid, you have $200 more to toss at personal loan 2. $470+$332 + $1,200 + $200.

The loans "snowball" meaning you gain momentum. Side job income. Toss that on.

This method is popular because it works (if you really want to kill the debt). Now, you could start doing the if/but/what strategy. Well, student loans are good and should be paid last. Car loan rate is lower than personal rate, should be last. That doesn't matter because this is going to take 18 to 24 months and then all of them will be gone. Interest won't make the difference. Finishing each debt will make the difference.

People here don't like Dave Ramsey for his investing advice. I get that. His get out of debt strategy works and the amounts you have, it works quite well.

It feels "tight" with a $1,000 Emergency Fund because it is supposed to feel urgent. Very urgent. Once the debts are gone, now you have all those payments to go to rebuild the Emergency Fund. Then start back with pre-tax 401k, Roth. Taxable should only be used once you max pre-tax 401k and Roth IRA. No reason to do taxable until you are using all your tax advantaged space up. Match in 401k does not count toward the $19k max for 2019.

Another option to consider. Good luck!
:sharebeer

Yes, Dave Ramsey works! Go read his books or listen to his podcasts! Use the snowball method. Just stick to his plan, stop trying to do math and trying to figure out if paying the high interest debt first is the way to go. As Dave likes to say, if you are so good at math then why are you in debt in the first place?

My wife and I decided to follow his method a year and a half ago, we just got sick and tired of seeing our money disappear everymonth just going to the banks paying debt. We started with $145K in debt, mainly because we wanted to show off our income by driving expensive cars and buying stuff with our credit cards. Fast forward 18 months and we will be sending the last payment this month. It’s not easy, how bad do you want to be debt free? We wanted it bad enough. I’m tired of eating beans and rice but hey it was worth it! Just like you we had no one teaching us about finances and we got our selves in trouble. We also want to teach our two kids how to properly handle money. Cheers.

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Re: Attempting To Be Debt Free

Post by Thesaints » Mon Feb 11, 2019 2:31 pm

just imagine how much better off you would have been, had you followed the highest interest first. But I guess that too would have required playing with decimal numbers and multiplications...

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Re: Attempting To Be Debt Free

Post by theRemedy » Mon Feb 11, 2019 2:48 pm

Thesaints wrote:
Mon Feb 11, 2019 2:31 pm
just imagine how much better off you would have been, had you followed the highest interest first. But I guess that too would have required playing with decimal numbers and multiplications...
Lol, sure tell your self that :)
I did the math multiple times, I am an engineer, a nerd by trade. I made multiple spreadsheets trying to optimize my payments by different methods. The whole point is to pay off your debt fast, the extra interest you pay at the end of the day is not significant. Well worth the psychological effect it has on the person. Snowball method all the way! 8-)

Thesaints
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Re: Attempting To Be Debt Free

Post by Thesaints » Mon Feb 11, 2019 2:53 pm

Multiple spreadsheets to calculate whether it is better to pay off a 0% interest debt first, or a 10% interest one ? Seriously ??
The point is that, regardless how large or small is the financial advantage, it does not require a STEM degree nor even thinking about it, to know that one is better off by always repaying whichever debt currently has the highest interest first.
It is built in the commutative and associative properties of the ordinary multiplication.

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Re: Attempting To Be Debt Free

Post by KyleAAA » Mon Feb 11, 2019 3:17 pm

theRemedy wrote:
Mon Feb 11, 2019 2:48 pm
Thesaints wrote:
Mon Feb 11, 2019 2:31 pm
just imagine how much better off you would have been, had you followed the highest interest first. But I guess that too would have required playing with decimal numbers and multiplications...
Lol, sure tell your self that :)
I did the math multiple times, I am an engineer, a nerd by trade. I made multiple spreadsheets trying to optimize my payments by different methods. The whole point is to pay off your debt fast, the extra interest you pay at the end of the day is not significant. Well worth the psychological effect it has on the person. Snowball method all the way! 8-)
In some situations the extra interest is not significant. In some situations it is VERY significant. You can't really generalize. Evidence for the "psychological effect" of the snowball method is iffy at best.

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Re: Attempting To Be Debt Free

Post by jason1 » Mon Feb 11, 2019 4:16 pm

-Pay off the credit cards within 4 to 5 months, currently making $200 monthly payment, use the saving in Bank 2 to pay them off;
-Use $10,000 of the emergency fund to pay off Personal Loan 2
-Stop the combined $200 in Roth and Taxable and Emergency fund contributions and have that goes to the avalanche
IMO, you should stop Roth, Taxable, and Emergency fund contributions and liquidate your taxable account. Pull what ever else you need from your emergency fund to pay off personal loan (PL) 2. Looking at it this should leave you with at least a 1 month EF.
After this you can pay off your credit card debt in about 4 months (combining the original 200, 318 from the PL2 payments and 200 from your stopped contributions). Then adding all that to PL1 it should be gone in another 16ish months.

So after 20 months you should be down to two low interest debt's, one almost on its way out naturally. Now you can rebuild your emergency fund and accelerate payments on the remaining debt.

This is a workable plan but one thing I see that will put a huge ding in any plan proposed here is the following:
Side jobs: ~$5,000 - $10,000 (two side jobs, plan to stop both in few months)
If you plan to quit a 600-1200 a month income stream prior to paying off your debts you will be slamming the brakes. Unless you can replace this or cut elseware I do not think you have a working plan going forward.

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Re: Attempting To Be Debt Free

Post by JGoneRiding » Mon Feb 11, 2019 4:18 pm

KyleAAA wrote:
Mon Feb 11, 2019 3:17 pm
theRemedy wrote:
Mon Feb 11, 2019 2:48 pm
Thesaints wrote:
Mon Feb 11, 2019 2:31 pm
just imagine how much better off you would have been, had you followed the highest interest first. But I guess that too would have required playing with decimal numbers and multiplications...
Lol, sure tell your self that :)
I did the math multiple times, I am an engineer, a nerd by trade. I made multiple spreadsheets trying to optimize my payments by different methods. The whole point is to pay off your debt fast, the extra interest you pay at the end of the day is not significant. Well worth the psychological effect it has on the person. Snowball method all the way! 8-)
In some situations the extra interest is not significant. In some situations it is VERY significant. You can't really generalize. Evidence for the "psychological effect" of the snowball method is iffy at best.
It's been a while since I have read Dave's book. But even he advocates for targeting certain loans over others if they are close in value and or there is a psycho benefit to pushing one still done. In this case targeting the car loan makes no sense since it will be done when or very shortly after OP finishes the other debt just by paying the required amount. The SL is fairly high amount and low interest so pretty sure Dave and all math would agree leave that till last. The cc debt is most likely already refi debt but you don't want those rates to reset so set it up so it is all done before it does makes sense.

That leaves the personal loans. I would actually agree with Dave and say go after the lower balance first they just happen to have the same rate. But if one was 7% and the other 10% I would go after the lower balance first in order to kick some.

But like I said I think even Dave makes exception for when you have some loans at very high rates and others are very low rates.

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Re: Attempting To Be Debt Free

Post by IMO » Mon Feb 11, 2019 9:52 pm

bloom2708 wrote:
Mon Feb 11, 2019 12:56 pm
I would "Dave Ramsey" this debt.

People here don't like Dave Ramsey for his investing advice. I get that. His get out of debt strategy works and the amounts you have, it works quite well.
I personally never had to do the Dave Ramsey thing for debt/investing. But I've listened to his radio show a bit. For those with debt problems, in most situations you must be doing something wrong in your financial life.

He seems to get many out of debt and while many may criticize his personal philosophy on carrying debt (including a mortgage) that is fine. But it works for many people and while it may not be the "mathematically best long term route" that thought seems to negate the "personal" in personal finances.

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Re: Attempting To Be Debt Free

Post by EnjoyIt » Mon Feb 11, 2019 11:01 pm

Lots of good advice on helping you pay down debt so I will offer something different.

Your debt is an emergency. Maybe it is also worthwhile to look at your budget as well. Can you cut on unnecessary expenses? Remember every time you buy something you don’t really need as opposed to paying on your 10% debt, you are actually financing that thing you bought.

Can you cut cable and just use Netflix?
Can you change cell phone plans for something less expensive?
Can you bring lunch to work?
Can you cut out alcohol?
Do you drink Starbucks?
Do you have stuff around your home you don’t use anymore that you can sell?

Let’s get really serious about that debt and go through your budget with a fine tooth comb. Every dollar you don’t waste will be used to buy your freedom.

Good luck.

Ohh, I agree, stop adding money to emergency fund, taxable, and Roth and divert everything towards debt. I would consider depleting your emergency fund down to 2 months of bear bones spending. I agree with depleting your taxable account to help pay down debt. I agree with funding your 401k up to the match.

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Re: Attempting To Be Debt Free

Post by smitcat » Tue Feb 12, 2019 7:35 am

Based upon your numbers your actual living expenses are very low at $18K a year all in.
Your debt service is $14.4/yr and your savings is at about $20K a year.
The approach to debt resolution is good and these posts above refine which ones to go after in order.
The only other reasonable approach that would lead to a faster debt relief appears to be additional income.
Once you have made headway on the higher interest loans the others will go much quicker.

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Re: Attempting To Be Debt Free

Post by djpeteski » Tue Feb 12, 2019 8:27 am

As a fellow divorced father, the advice I would offer is daveramsey.com. It is counter intuitive, and goes against conventional wisdom, but it works. Conventional wisdom ignores the fact that we are emotional and often that emotion short circuits logical decision making. Marketing is designed to take advantage of that fact.
ygman wrote:
Sun Feb 10, 2019 12:42 pm
My younger self made a lot of mistakes and I am learning from these mistakes everyday. Growing up, I have no financial education and no one to learn from but I want to change that for my children.
One thing that Dave Ramsey often talks about is building a legacy for your children. My subsequent wife and I have done that for our children in a remarkably short time. It has brought a very peaceful existence to our lives and that of our children.
Past few years have been very depressing
Emotion, you are not weird you are normal. Congratulations, you are a dad that cares for his children. In other words a "real man" in my book. Madison Ave will mistakenly tell you that you are only a "real man" if you drive an F150.
The retirement investment train is leaving me behind, it seems. Below is a breakdown of my income and debts. I do not think I have the right approach to reach my goal.
That is a feeling. It isn't. Once you are out of debt you can catch up. You need to be decisive in your actions and you need some wins.

Here is what I would do:

1) Liquidate bank #1
2) Make bank #2, 1,000 (banks are interchangeable here) You will have 10,800 to your name.
3) Pay off credit cards
4) Pay off car, you will still have about 500 left.
5) Put that towards personal loan #2.

Following those simple steps will reduce the amount of debts in half. No more CC debt, no more car payment. You will now have 789/month to put towards Personal loan #2.
-Stop the combined $200 in Roth and Taxable and Emergency fund contributions and have that goes to ...
Personal loan #2. Now you are up to 989/month.

I would also stop contributing to taxable, and liquidate it. Lets say you do that. I bet in about three months you will be done with Personal loan #2.

So before the kids are out for summer vacation, your debts will look like:

Personal Loan 1: 15,000 at 10% (five years left on seven years term, pay $332 a month)
Students Loan: $9,900 at 3.5% (five years left, initial amount was $26,500 and been making payment for 13 years, pay $200 a month)

Total monthly payments toward debts is $532.

How would that feel?

I am thinking about another two years, and you are done. That is without any increase in income. As a dad paying child support, the road ahead is a bit tougher, but it can still be done. Good luck to you.

BTW, that is what I did, are debt free and are good on retirement savings.

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8foot7
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Re: Attempting To Be Debt Free

Post by 8foot7 » Tue Feb 12, 2019 9:12 am

djpeteski wrote:
Tue Feb 12, 2019 8:27 am
ygman wrote:
Sun Feb 10, 2019 12:42 pm



The retirement investment train is leaving me behind, it seems. Below is a breakdown of my income and debts. I do not think I have the right approach to reach my goal.
That is a feeling. It isn't. Once you are out of debt you can catch up. You need to be decisive in your actions and you need some wins.


While djpeteski is right that retirement is still very much within reach for you, I don't think it's useful to pretend that you have the same advantages of time on your side as a 25 or 30 year old. The train is leaving. But it's a long train, and one you can catch the end sections of.

That is to say, clean your situation up as fast as you possibly can so that you can jump on board with retirement, precisely because you have indeed lost some valuable years of savings and compounding.

It's not too late but you also don't have a lot of wiggle room.

I lost pretty much everything in a divorce, too, so I know where you're coming from. Good luck! :sharebeer

tindel
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Re: Attempting To Be Debt Free

Post by tindel » Tue Feb 12, 2019 9:48 am

ygman wrote:
Sun Feb 10, 2019 12:42 pm
Here is what I have in mind:
-Pay off the credit cards within 4 to 5 months, currently making $200 monthly payment, use the saving in Bank 2 to pay them off
-Use $10,000 of the emergency fund to pay off Personal Loan 2
-Use the debt avalanche to go after Personal Loan 1 and then attack Auto and Student loans
-Stop the combined $200 in Roth and Taxable and Emergency fund contributions and have that goes to the avalanche
I like paying off the personal loan and stopping contributions to everything except the company match.

The biggest question is "How do you get rid of the other 10% loan quickly"? Here's what I'd do:
I'd sell everything in your taxable account. I'd also sell the car and get a beater or a bike. Use the proceeds to kill that 10% quickly. Selling the car will hopefully get you out of two loans quickly.

I'd then put all extra cash toward the CC. After CC is paid off keep snowballing the payments to the student loans. $10k will disappear quickly with a $1500 payment!

I think you can get out of debt before the end of the year if you want to.

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Re: Attempting To Be Debt Free

Post by hightower » Tue Feb 12, 2019 12:15 pm

ygman wrote:
Sun Feb 10, 2019 12:42 pm
Hello everyone,

I am a 38 years old male, divorced and deep in debt. My younger self made a lot of mistakes and I am learning from these mistakes everyday. Growing up, I have no financial education and no one to learn from but I want to change that for my children. By the time my divorce finalized two years ago, I have approximately $65,000 in student, auto, personal loans and credit cards debts. Past few years have been very depressing - not seeing my kids daily took a toll on me. I never consider bankruptcy, like the Lannisters (lol), I want to always pay my debts. Today, I have about $45,000 left. Six months ago, I started doing some research because I could not stare at this monster anymore. I landed on bogleheads.org and set it as my homepage and been a reader since. My interests were personal finance and investing - subjects I was clueless about for a longtime. Did not start 401K until four years ago (wasted six years of company match), still did not have a clue, it was just signing up and contribute 1%.

Today, I come to you seeking your advice. My ultimate goal is to be debt free before or at the time I reach 40. The retirement investment train is leaving me behind, it seems. Below is a breakdown of my income and debts. I do not think I have the right approach to reach my goal.

Income:
Regular job: S76,000 (expecting 3% to 7% increase later this year)
Side jobs: ~$5,000 - $10,000 (two side jobs, plan to stop both in few months)

Investment (through Fidelity):
401K: $14,000 (contribute 6%, employer matches 50%)
Roth: $125 (started to contribute $50 a month by setting up automatic withdraw from my bank)
Taxable: ~$6,000 (about $4000 is employer stocks, also contributing $50 monthly through paycheck deduction and $50 automatic from my checking account to buy ITOT)

Cash:
Bank 1: Money Market Saving - $11,000 - earning 2% interest (set as my emergency fund and contributing $100 a month)
Bank 2: Saving - $800

Child Support: $1,600 monthly

All Debts:
Credit card: $3,000 (0% for next eight months, Chase and Discover, pay $200 a month)
Personal Loan 1: 15,600 at 10% (five years left on seven years term, pay $332 a month)
Personal Loan 2: 9,900 at 10% (three years left on five years term, pay $318 a month)
Students Loan: $10,400 at 3.5% (five years left, initial amount was $26,500 and been making payment for 13 years, pay $200 a month)
Auto Loan: $7,000 at 4.95 (two years left on four years term, pay $271 a month)

Total monthly payments toward debts is $1,200.

Other payments including rent, utilities, fuel, food, etc...: ~$1,500


Here is what I have in mind:
-Pay off the credit cards within 4 to 5 months, currently making $200 monthly payment, use the saving in Bank 2 to pay them off
-Use $10,000 of the emergency fund to pay off Personal Loan 2
-Use the debt avalanche to go after Personal Loan 1 and then attack Auto and Student loans
-Stop the combined $200 in Roth and Taxable and Emergency fund contributions and have that goes to the avalanche

What do you think? Is there anything else you would change if you were in my situation?

Thank you in advance. I'm ready to answer any follow-up questions or clarifying things if needed.
Personally, I would get rid of that personal loan #2 immediately with the 11k you have sitting in a MM. It makes no sense in my mind to be paying 10% interest on a loan while holding on to cash that is only earning you 2% (plus you have to pay tax on those earnings). I would pay it off today and free up that $318/month and use it to snowball that next personal loan asap.
Stop contributing to the taxable. You can sell those funds now and pay off your auto loan to free up an additional 271/month. That's nearly 600/month of payments gone overnight. That's also 600/month towards personal loan number 1 you can now really pay off quickly.
Agree with contributing just enough to your 401k to get the match
You don't need a giant emergency fund. $1000 is enough (I agree with Dave Ramsey on this). You have a debt emergency and need only 1k to accomplish baby step #1. Those savings are best used to free up your cash flow. You have good income and the ability to redirect income if you need extra/unexpected funds on any given month. What you desperately need is to free up cash flow by getting rid of the loans mentioned today!
I just finished paying off around 250k of debt over the last few years (med school loans, personal loan, car loans, cc) . Getting rid of balances and freeing up cash flow is essential! It re-energizes you and helps you carry on. It also helps you to really take advantage of the snowball method. You could be debt free in <2 years easy if you're focused.

You're not in terrible shape overall, just behind on your retirement savings and need to get a handle on the consumer debt. And never borrow for consumer goods again. But, you have solid employment with good income and can easily dig yourself out and turn things around pretty quick if you're diligent.

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ygman
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Re: Attempting To Be Debt Free

Post by ygman » Tue Feb 12, 2019 10:37 pm

Thank you for all the advice. I really appreciate your help. I am very happy after reading the responses. This is the happiest I have been in a long time. I am motivated, focused and ready to make this work. I have already stopped all contributions except for the company match.

Some of you have asked about my budget, this is a very simple one.

Rent: $650
Electricity: $25 - $40
Car Insurance: $71
Internet: $52 (cancelled this week)
Food (mostly going out for lunch at work): $150 - $200 (effective immediately I'm on tuna, rice and beans for lunch)
Fuel (this one is a killer): $200 - $250 (Pilot - combined 18 MPG)
Cell phone (prepaid): $60 (receive $50 stipend from regular job and $20 from one of the side jobs, 15 GB hotspot)

I will use this post to update my progress until debt-free. When the kids get older, I'll have them read this post one day. :D

EnjoyIt
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Re: Attempting To Be Debt Free

Post by EnjoyIt » Wed Feb 13, 2019 1:04 am

ygman wrote:
Tue Feb 12, 2019 10:37 pm
Thank you for all the advice. I really appreciate your help. I am very happy after reading the responses. This is the happiest I have been in a long time. I am motivated, focused and ready to make this work. I have already stopped all contributions except for the company match.

Some of you have asked about my budget, this is a very simple one.

Rent: $650
Electricity: $25 - $40
Car Insurance: $71
Internet: $52 (cancelled this week)
Food (mostly going out for lunch at work): $150 - $200 (effective immediately I'm on tuna, rice and beans for lunch)
Fuel (this one is a killer): $200 - $250 (Pilot - combined 18 MPG)
Cell phone (prepaid): $60 (receive $50 stipend from regular job and $20 from one of the side jobs, 15 GB hotspot)

I will use this post to update my progress until debt-free. When the kids get older, I'll have them read this post one day. :D
Very nice budget and plan. I love it how eager and aggressive you are being at tackling this debt. I would offer you good luck. . . but you simply don't need it. Keep treating your debt as the emergency that it is, and you will be victorious.

Just out of curiosity, have you had any thoughts about moving closer to work so that your commute is significantly shorter? Any thoughts about replacing the pilot with something used, smaller, and much more efficient? Might not be worth it if the goal is just to be debt free, but can be very worth it if the goal is also to retire ASAP.

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