Hello, I am looking for some advice on my current financial situation. I am 27 years old and I make $125K a year. I just barely paid off all of the personal debt that I was in, (auto, CC, student loans, etc). I got engaged to my girlfriend a couple of weeks ago. She unfortunately lost her job shortly after we got engaged. She has personal debt that totals $85k with no rate being higher than 6%. She was making $30K a year and paying off her bills and helping to chip in on our living expenses. Unfotunately my line of work prevents her from finding a new job very easily. I move every 6 months, so it has to be flexible. Our joint living expenses, including her minimum debt payments, total $65k a year.
My question is this: Should we focus our efforts on paying off her outstanding debt balances or should we just pay the minimums and start to contribute money to a savings account for retirement?
I got a large raise in Oct from making $50k to $125k and I was in some serious debt trouble
2007-01-29 06:35:28 · 6 answers · asked by Anonymous in Business & Finance ➔ Credit
Contribute the maximum amount of what your company matches to your 401(k)...that is free money for you. Apply the remainder of your disposable income to the debt.
Also, transfer whatever you can to a 0% interest card and pay that off within the alloted time.
2007-01-29 07:05:16 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Her interest rates might not be higher than 6% now, but they may go up if they're not fixed. I can't imagine having debts that charge less than the standard earnable interest rate, which is why I always advise people to pay off your debts before making any investments, unless you have reason to believe you'd be receiving a higher yield on your investment than her debtors are making off of her. Your salary is incredible for your age (and I hate you, btw), so I would recommend investing in killing off that debt while you still have the ability. I would recommend paying down debts on a one-to-one basis with whatever you invest in savings and retirement. If you have $2,000 at the end of the month, put $1,000 in savings and $1,000 into the debt. You might be in great shape now, but the future is always uncertain, so take advantage of your great circumstances and drill down that debt while you can, so that if the market crashes and your company crumbles, you don't have that hanging over your heads. Nonetheless, it's no good putting all of your money into debt either, because reduced debt won't help pay the bills in a time of need. So like I said, do a one-to-one debt reductions and savings/investment plan.
2007-01-29 18:49:18 · answer #2 · answered by Firstd1mension 5 · 0⤊ 0⤋
I agree with above. Go to your bank and speak with their financial adviser. At worst, she could waitress to still bring in a reasonable amount of money. Including tips, over the course of a year I made well over 30,000$ working 5-6 hour shifts. It would be very nice of you to pay off her debt but it won't teach her any level of financial responsibility and the consequences of her actions. She was a big of enough of a girl to get herself into debt, she can be a big girl and get herself out of debt, too.
2007-01-29 14:47:20 · answer #3 · answered by sovereign_carrie 5 · 0⤊ 0⤋
I suggest you do both. The concentration should be to pay off the debt ASAP but start a small investment into the future. See a financial advisor for proper investment advice.
2007-02-01 15:26:31 · answer #4 · answered by plum_oasis 1 · 0⤊ 0⤋
For her to get that much is on making 30k is insane. You should pay her stuff off, and stop borrowing money. I make 40k a year and my wife make 35k a year and we own 2 houses, 2 cars and have no credit card debt. You should really learn to manage you finances better and invest.
2007-01-29 15:03:57 · answer #5 · answered by simsad31 2 · 0⤊ 0⤋
I'd see a qualified financial advisor.
Possibly, someone that you have been referred to by a trustworhty source.
Good luck
2007-01-29 14:39:11 · answer #6 · answered by annabanana 2 · 0⤊ 0⤋