Hi Money Minder,
I’ve just landed a job in Virginia Beach making 100k a year. I’ve also got a pesky 14k in credit card debt hanging over my head. My company does a 3% match on my 401k contributions. How can I tackle this debt in 1.5 years while also saving and investing around 10k or more? My rent is 1500 and utilities are about 250. I’m committed to not using my credit card once that first paycheck hits.
Looking forward to your expert advice!
Best,
Savvy Saver
Farewell, Savvy Saver
Response from THE MONEY MINDER:
Hello There,
Congratulations on your new job in Virginia Beach! It’s great to hear that you are motivated to tackle your credit card debt head-on and start building towards your financial goals. The first step in your plan should be to create a detailed budget outlining your monthly income and expenses. You’ve already laid out your rent and utilities, which is a good start. Next, look for areas where you can cut back on spending to free up more money to put towards your debt.
With a $100k salary, you have a good foundation to work from. Since you mentioned you’ll no longer be using your credit card, make sure to put any extra money towards paying off the debt. Take advantage of your company’s 3% 401k match, as that is essentially free money. In your case, it’s important to keep contributing to your 401k, even while paying off debt, to not miss out on that match.
With a goal of paying off $14k in debt in 1.5 years, you’ll need to pay roughly $778 per month towards your credit card. This may mean cutting back on non-essential expenses or finding additional ways to increase your income. Once you’ve paid off the debt, you can then focus on building up your savings and investments.
Remember, it’s important to stay disciplined and committed to your plan. It may not be easy, but with determination and a clear strategy, you can achieve your goal. All the best from THE MONEY MINDER!
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