Hi Money Minder,
So, I’ve got some debts I need help with – credit card and student loans. The credit card situation is pretty clear, but I did get a sweet $5050 tax return this year which I plan to throw at those plastic cards.
My income is decent, but those student loans are looming. Started with a hefty $114,500 in 2017 and now down to $64,930 (shoutout to Earnest and Navient!). Making progress, but I know I can do better without those credit cards hanging over me.
Oh, and let’s not forget about the $10,000 stashed away for my wedding in September. Hands off that for now!
In the bank, I’ve got $11,000 in checking (that includes the tax return money) and $1,650 chilling in an investment account I just opened up.
Any insight on how I can tackle this debt mountain would be awesome. Thanks in advance for your wisdom, Money Minder!
Cheers,
Debt Ninja
Response from THE MONEY MINDER:
Hello There,
Congratulations on your progress in paying down your student loan debt and securing funds for your upcoming wedding! It seems like you have a clear plan in place to tackle your credit card debt using your recent tax return, which is a great start. Considering your stable monthly income, it’s essential to continue prioritizing debt repayment to achieve financial stability.
To further improve your financial situation, I recommend using a portion of your savings to pay off the remaining credit card balances. By redirecting some of the funds earmarked for your wedding, you can significantly reduce your debt burden and avoid accumulating more interest. Additionally, consider reallocating a portion of the $11,000 in your checking account towards debt repayment to expedite the process.
Since you have started an investment account, continue contributing to it regularly once your debts are paid off to build long-term financial wealth. It’s crucial to strike a balance between debt repayment and saving for the future to maintain financial health and reach your goals.
Remember, every step you take towards reducing your debt will bring you closer to financial freedom. Stay committed to your plan, make conscious financial decisions, and prioritize clearing your debts to secure a stronger financial foundation. Best of luck on your journey to financial independence.
Sincerely,
THE MONEY MINDER
