‘Would it be wise to sell some stocks or borrow money from my IRA to pay off my bills?’: I fell behind on credit card bills due to unexpected expenses. How can I catch up quickly?

Hey Money Minder,

I messed up and fell behind on my credit card bills because life threw me some unexpected expenses. My savings can cover my day-to-day expenses, but not these pesky credit card bills. I need to get back on track, so I’m wondering if it’s a good idea to sell some stocks or dip into my IRA to pay off these bills. What do you think?

Cheers for any advice you can offer!

Response from THE MONEY MINDER:

Hello There,

I understand that falling behind on credit card bills can be stressful, especially when unexpected expenses arise. It’s good to hear that you have enough savings to cover living expenses, but, as you mentioned, credit card bills can add up quickly.

In this situation, selling some stocks or borrowing money from your IRA should be a last resort. Before touching your investments, consider creating a budget to prioritize paying off your credit card bills. Look for areas where you can cut back on expenses to free up more money to allocate towards your debts.

Additionally, contact your credit card company to see if they can work out a payment plan or negotiate a lower interest rate to make it easier for you to catch up. It’s essential to communicate with them to avoid further penalties or damage to your credit score.

Ultimately, it’s crucial to address the root cause of falling behind on your credit card bills and make a plan to catch up without jeopardizing your long-term financial stability. Remember, taking proactive steps now can prevent the situation from getting worse in the future.

Take care and best of luck in getting back on track,

THE MONEY MINDER