[USER]

Need financial advice! Please help.
Husband and me have combined income of 13k per month after deductions and recently closed home mortgage (6.8%), bills, monthly expenses are approx 8k per month.

After all this we will be left with 5k per month.

Have a credit card debt of 50k at present and trying to pay off with monthly savings of approx 5k.

With the uncertainity in the job market, what are the best ways to protect us financially?

We want to save money for rainy day funds, pay off credit cards, save for future.

[Jasmine]

Set an emergency fund and then tackle the debt. But question, are you done with the habits that got you in debt?

Just so you don’t pay down the debt and put charges back on the card at the same time.

Very common for people to do this and not make progress.

[Jule]

Put $5000 aside and start aggressively paying off the credit card.
Do not save or contribute over your match to your 401k.

No IRA contributions either until the debt is gone. Can you sell anything to throw at it? Get a side gig?

Stop eating out and no vacations.

The goal is to get the debt gone within a year or less – make it a goal to be consumer debt free by Christmas 2025.

Then you can start maximizing retirement investments and have a proper emergency fund.

[Hannah]

I would save at least 1-3 months worth of expenses and then throw everything at that credit card debt but that’s just me.

After that save 3-6 months expenses and start investing

[Lisa]

I would first have $1000 set aside for any EMERGENCIES, then I would Pay down the credit card debt ASAP, even if that means eating rice and beans for dinner, sell things for extra money, perhaps get part time jobs.

Then AFTER debt is paid off and you STOP using those credit cards, save 6 months of expenses in an emergency fund.

Then start saving 15% for retirement.

[Mary]

Get rid of the credit card debt ASAP. With an estimated APR of 25% you are being charged $12,500 a year (probably more with regular compounding) in interest a YEAR to keep that debt.

[Nick]

Read or listen to Dave Ramsey. Pay off the debt as fast as you can. Don’t go back. Probably should not have bought the house yet.

[Heather]

Personally when I had a bit of credit card debt, I only kept like $1000 in liquid funds and then paid off all of my debt as quickly as possible.

[Rachel]

Can you get a home equity loan to pay off credit card debt?

[Mary]

Can you get a roommate for a year to help pay off debt? Drop down to one vehicle to save on insurance, gas, etc?

Cutting costs in the bigger areas of life is much faster than trying to make little savings everywhere.

[Author]

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