I’m Jake, a 35-year-old dude married to my awesome wife, Sarah, who’s 30. I bring in about $90k a year, while Sarah makes a cool $80k. I’m chipping in 75% of my earnings, and she’s tossing in around 35%.
My net worth, according to Credit Karma, is sitting at $115k. Most of that is tied up in our $305k house and a beat-up used car worth $5k (which is giving me some headaches, by the way!).
In my personal account, I’ve got $1.5k. Our joint has $25k chilling in a High-Yield Savings Account at 4.5%. We’ve also got another joint account with $4k. I’m not sure about Sarah’s individual account because she uses it to handle her bills and student loans. Speaking of which, she’s got around $70k in student loans and $15k in credit card debt that she’s working hard to pay off.
My 401k is at $15k, my brokerage account is at $12k, and I’ve got $8k in crypto.
Our mortgage is sitting at $230k from an original $250k loan with a 3.5% interest rate. We’re paying around $2k a month and looking to rid ourselves of that pesky PMI soon.
My own debts include a $2k credit card that I plan to wipe out with my personal account. I also have a $9.5k credit card debt that came up unexpectedly when we had to fix our roof after a storm. We had the choice to drain our joint account with $15k or go for the 0% APR for 36 months – we went for the latter option. I put down $4k initially to lower the monthly to $265, and we have about 32 months left.
I’m also paying $450 a month for a lease on a Mustang Mach-e that I got in January because my old car seems to break down more often than it runs. I might sell it to Carvana but I’m still on the fence.
After the $9.5k credit card debt, I’m feeling the urge to ditch the lease on the Mustang but there’s no buyout or transfer option. So it looks like I’m stuck with it for now. It’s a great ride, but I think I could ride-share with Sarah once she’s done with her car payments in about 6 months.
From our joint, we’re shelling out about $6.2k a month for necessities like the mortgage, Sarah’s car, groceries, utilities, gas for our hybrid, tolls, and the occasional takeout.
Out of my personal account, I’m covering the $265 credit card payment, the lease on the Mustang, some small debts, and $150 for my brokerage account.
Money Minder, any tips on how I can break free from this financial squeeze?
Later, Jake
Response from THE MONEY MINDER:
Hello There,
I understand the financial stress you are currently facing, and it’s commendable that you are seeking advice on how to improve your situation. Looking at your detailed breakdown of income, expenses, debts, and assets, there are a few practical steps you can take to start moving towards financial stability.
First and foremost, it’s crucial to prioritize paying off high-interest debt, such as credit card balances. Start by using your personal account to pay off the $2K credit card debt immediately. Then, focus on aggressively paying down the $9.5K credit card debt with the 0% APR before the promotional period expires. This will help reduce the burden of monthly payments and save you money in the long run.
Regarding the lease on the Mustang Mach-e, consider your transportation needs carefully. If carpooling with your wife is a feasible option once her car is paid off, returning the lease and eliminating the $450/month expense could free up more money for debt repayment or savings.
Furthermore, it’s advisable to address your wife’s high-interest debt sooner rather than later. Collaborate with her to create a plan to tackle her student loans and credit card debt effectively. It might be beneficial to consolidate or refinance these debts to lower interest rates and streamline payments.
In terms of your investments, continue contributing to your 401k and brokerage accounts to secure your financial future. Consider reallocating some funds from your Crypto investments to diversify your portfolio and mitigate risk.
Lastly, review your monthly expenses together and identify areas where you can cut back to increase your debt repayment capacity. Consistently tracking your spending and maintaining a budget will help you stay on top of your finances and achieve your goals.
Remember, financial stability is a journey, and small steps taken consistently can lead to significant improvements over time. Stay committed to your financial plan, communicate openly with your wife about your joint finances, and seek professional advice if needed.
Best of luck on your financial journey,
THE MONEY MINDER
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