Reply to What to do first? Debt vs Savings/Retirement

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[quote=Anonymous][quote=Anonymous]OP, I assembled all of your information into one place here.  I was having a hard time getting the complete picture because your details were posted but by bit.

DEBTS:
Credit cards: $7K / $?? monthly @    @24%
Car: $30K / $820 monthly  @11% underwater worth $24K
Car: $17K / $492 monthly  @7%
Consolidation loan:   $Total ?? / $305 monthly at ?? %
Student Loans:   $Total ?? / $125 monthly at ?? %

HHI is 230K
Expected cash bonus ranging $15K
Monthly Take home… $10,000?

Monthly Expenses:

[u]Debt Repayment:  1743[/u]
Student loans 125
Consolidation 305
Car 821
Car 492

[u]Housing: 3150[/u]
Rent 3000
Cleaning 150
Furnishings: ??

[u]Costs of Kid: 705[/u]
Care:  $400
Activity: 105
Education: 200
Clothing?
Birthday/Gifts/Toys?

[u]Transportation (besides car debt): 492[/u]
Insurance 192
Gas: 200
Metro  100

[u]Internet TV Cell Music:  433[/u]
90
156
158
29

[u]Grooming/Clothing:  80[/u]
Hair 80
Clothing:?
Makeup? Toiletries?

[u]Food:  400[/u]
Groceries 400
Household (aluminum foil etc) ??
Meals Out ???

That all adds up to $7000 so you are definitely missing something or else that would be another $3000 you could apply towards your debt!

I think you should use your bonus to get out from underwater with your car #1 and then sell that car for as much as you can get for it.  Replace it with a reliable but cheaper car. Sell your other car as well, and replace it with a much cheaper one.  You only need one super reliable car.  Your husband could Uber to metro, or maybe even ride a bike.

Selling both cars and buying with cash will get rid of those monster car payments, and should bring your insurance payments down as well.

As soon as those are sold, start paying down your $7000 credit card.  Take the money you had been sending to the car payments ($1300) and add any savings from insurance to it, and add it to what you were paying as your minimum payment on the credit cards.   By cutting back in the rest of your budget,  you should be able to make payments of $2000/monthly on your income.   So the CCs should be paid off in less than 4 months.

Now take that $2000 and add it to the $300 you are paying on your husband's consolidation loan, which is how much?   Can't tell how long it'll take to pay that off at $2300 a month.   But keep paying, and if possible cut back elsewhere in your budget and send any little thing you can off to that debt, and then finally to pay off your student loans.

If you moved somewhere cheaper you could pay everything off faster, but I can understand not wanting to move with a 1st grader in school.

Once all your debt is paid off you will be in a great position to save for retirement.  You will have reduced your living expenses and be used to sending $3000 a month off to debt repayment:  just maintain your standard of living and send that money to retirement instead![/quote]

Incredibly helpful, thank you.  I am not used to doing that kind of budget.  I usually just budget for fixed expenses and then, whatever we have left over, we contribute to other items that are in the budget you just posted.  The lack of budget is what is killing us.  I realize that. [/quote]

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