2007-02-27 07:14:08 · 6 answers · asked by Vickie B 1 in Business & Finance ➔ Personal Finance
You don't. Pay off the credit cards first. Get on a budget and get them paid off fast. But before you begin you need an emergency fund of $1000 for the little emergencies so you don't go further into CC debt. Then pay off the credit cards, start with the lowest balance then go to the next lowest balance when the first is paid off. When you go to card #2 use the monthly amount you were paying to card 1 and add it to your minimum payment for #2 and continue this pattern (also known as a debt snowball) until all are paid off. After that get 3-6 month emergency fund. Then start putting 15% of your income in retirement, starting with maxing out ROTH IRAs.
For more details on the above plan read The Total Money Makeover by Ramsey. He explains why you do all the steps in order. Why you start with lowest balance instead of highest interest rate, etc. It is a very fast reading financial book. He also adds stories from people that follow his plan and their success and where they started his plan.
We have used his plan for over a year and have paid off more than 15k in debt.
2007-02-27 07:40:25 · answer #1 · answered by mldjay 5 · 0⤊ 0⤋
There are ways to save up to $100 a month on your usual expenses. Take care of your credit card debt first! Don't put money in a savings account that will only generate you 1-3% interest when you're paying as much as 9-18% interest in credit card debt.
If you try to pay for both at the same time you WILL lose money. Once you take care of credit card debt, then use the same formula for retirement savings. This means its like you're still paying off your credit cards, but all the money is going into retirement and savings.
The page below details information on how to save this extra money every month and get rid of your debt.
2007-02-27 11:00:30 · answer #2 · answered by novansa7 2 · 0⤊ 0⤋
You save for retirement by stop buying crap on credit cards. If you can't pay cash, don't buy it.
Pay off existing debt
Invest same amount you were paying credit card debt monthly
Put a picture of people during the depression on your refridgerator and one of a beautiful beach resort. Ask yourself daily which one you want to guide your life.
2007-02-27 07:26:34 · answer #3 · answered by mark c 2 · 0⤊ 0⤋
Stop using your credit cards immediately and focus on paying off the balances. Put aside every spare dime you can and put it towards the CC balance. Then save for future. The credit card debt will just continue to grow and needs to be "cut off at the knees"!!
2007-02-27 07:20:07 · answer #4 · answered by AnastasiaBeaverhousen 4 · 0⤊ 0⤋
Get the credit cards paid off first. The interest you will save by not having that debt will add significantly to your nest egg. Once they're paid off, you will have all that much more to invest each month in your future.
2007-02-27 07:19:29 · answer #5 · answered by Faye H 6 · 1⤊ 0⤋
GET THE FLIPPING CREDIT CARDS PAYED OFF AND DUMP EM'S...
EAT RETIREMENT UP...IN INTEREST.
AFTER FREEING YOURSELF FROM BONDAGE-YOU CAN SEE HOW EASY IT IS TO SAVE..
2007-02-27 07:18:46 · answer #6 · answered by cork 7 · 0⤊ 0⤋