You are right guys. Deep down, I do know is not the right decision. .... I don't have family around, so living with someone would not be an option. . Congrats PP on paying off that 50k

I live in Arlington and work in Tysons, it takes me 25 minutes door to door. 45 mins seems like a lot, don't think that is an accurate estimate. You will get good schools in arlington

Don't cash out the 401k, OP. You know deep down it's not the right move although it would feel so good to have the debt gone. Just make some changes and pay off the debt using other sources.

Anonymous wrote:I feel like I won the lottery. I just put everything on my excel spreadsheet and realized that months ago I set up an automatic payment from my bank to take out $100 every week and transfer it to my online savings bank account. I just checked the account and saw that i have $1500 there So I can use this $1500 to pay off something right away, yeYyy !!!!! This is such an amazing feeling!

PP, When K starts, I think I will be able to save an extra $600

Congrats! But what this makes clear is that you don't have a good handle on all your balances and your budget. Set up your accounts and budgets in software like Quicken or on Mint.com and you'll be able to see where the money really goes. This will help you work out a better plan to pay off your debts.

I know it's not an option for everybody, but if you have parents/relatives/friends that would let you move in with them for a while for cheap...that's what I would do before I would tap a 401K. Or what about sharing a place with another working mom?

I hate to see you take that tax hit to your hard earned savings..

I would rent a cheap one bedroom for a year and try to pay off the cc debt that way.

Anonymous wrote:So I called the Plan again today and they said stated that my balance was 12599. If I cash it out, they will retain 20% for federal taxes and 4% for Va state taxes and at the end of the year I will have to pay more if the IRS decides that it wasn't enough or get some money back if it was too much. I am really torn about this decision. On one hand I feel like it would be so easy to just cash this out and pay off my debt. On another, I am not totally sure it's the right decision

Cashing out the 401k would be the easy way out of debt, but won't ensure that you don't get back into debt. $7k in debt isn't actually that bad. We're working our way out of more than $50k (now down to $17k). You say that in Sept. you'll have $600/mo to save/pay off debts - it would only take about a year (+/-) to pay off $7k with $600/mo. Plus you might have another few hundred in other savings pointed out by previous pps. In order to ensure you don't get back into debt you have to change your behavior and that takes time and discipline.

Put aside $1,000 of the money from your found savings account and use the rest to pay down the lowest balance card. Pay minimums on everything else. Every extra little bit goes to the lowest balance card, until it's gone. Then move on to the next. You will feel so proud of yourself if you work through this debt. You can do this!

Thanks for the links. Arlington would be too far for my commute. I have a Coworker who lives there and it takes her 45min. I will checkout the Oakton location n the school it feeds to when I go home since I can't do it at work. I started looking at places actually because I need to move out in 2 months. However most places I found did not feed into good schools when the rent was affordable

You need to look harder at your housing costs, there are lower cost options. Here are examples:

http://washingtondc.craigslist.org/nva/apa/4390672664.html

http://washingtondc.craigslist.org/nva/apa/4356422878.html

http://washingtondc.craigslist.org/nva/apa/4375933990.html

http://washingtondc.craigslist.org/nva/apa/4390050238.html


this would save $500 a month + utilities, not ideal but will get you out of the cycle you are in

So I called the Plan again today and they said stated that my balance was 12599. If I cash it out, they will retain 20% for federal taxes and 4% for Va state taxes and at the end of the year I will have to pay more if the IRS decides that it wasn't enough or get some money back if it was too much. I am really torn about this decision. On one hand I feel like it would be so easy to just cash this out and pay off my debt. On another, I am not totally sure it's the right decision

Do check out Dave Ramsey. He has a free podcast you can download and listen to every day. Yours is exactly the situation he addresses.

You may want to think about something like babysitting babysitting to pick up some extra cash. An extra $100 or $200 a month could help you make a dent in some of the debt.

And I agree with the others on lowering the thermostat, especially at night and while you're out of the house during the day.

i would do it, cut other expenses as much as you can, and arrange for an automatic deduction into a totally separate savings account for some of the money, so that you can build up an emergency fund. ideally make it a separate bank and don't get an ATM card, or if you do, put it in a locked drawer somewhere so it's not easy to use.

You will feel SO much better with a few thousand saved in the bank and no debt.

you say you won't use cards again but you know emergencies will come up so you can really only keep this vow if you have some money set aside.

Anonymous wrote:I would keep $1000 of that "found" money as an emergency fund. That way if your car breaks down or something you're not putting it back on the credit card.

That's what she's planning. Read the original post.

I would keep $1000 of that "found" money as an emergency fund. That way if your car breaks down or something you're not putting it back on the credit card.

Anonymous wrote:Your utils are super high! Why??

72 is too high. Turn down to 65 for heat and up to 77 for ac.

Im not sure, sometimes my electricity bill gets to $150/month ( heat and ac is electric in my apt)