Question about debt/loans/finances

M2LRM2LR Posts: 8,630Registered Users Curl Connoisseur
About a year or so ago, we paid off our credit card debt.

Due to "my personal life" (hee hee) namely my OCD, I have found myself in debt again. I really want to get out of it, and really get my ass in gear. I realize that it will take MUCH discipline on my part and I know that's going to be very hard for me.

I guess, aside from it taking 10 years to pay it off, what can I do?

I was thinking of taking out a 401k loan. I know that this isn't always a good thing to do, and Suze Orman said that it's one of the worst things that you can do. I have thought about just taking out a plain old 401k withdrawal, but I know that we get taxed on it now, then again when we retire or something like that.

WWYD?

Should I do a balance transfer to one of those 0% cards and just pay as I can?

We usually take our tax money and pay down some debt, but this year, we are taking all of it and paying one HUGE chunk of childcare for my toddler(it improves the monthly cash flow).

Thanks.
:rambo:

Comments

  • iris427iris427 Posts: 6,002Registered Users
    Do you have a financial adviser? My SO is an adviser and he will give this kind of advice for free.

    One thing he told me is that 401ks are protected from creditors. For that reason, taking money out of it to pay off debts is a bad idea.
    3027585431_55b6195e50_s.jpg3028374752_0df4d81a1b_s.jpg3028422696_8dcef38baa_s.jpg
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  • battinlashbattinlash Posts: 1,850Registered Users
    You have a PM!
  • wanderlustwanderlust Posts: 650Registered Users
    Hi M2LR,

    When I had alot of debt one thing that I did was, just as you said, transfer my credit card balance to a 0% apr credit card account and that worked out really well for me. I was able to pay off a large amount of debt in a short period of time due to this and the fact that I was fully committed to paying it off. You must be careful with these if you have never done this before, however. I know that some companies will change your apr to something like 20% if you are late with one payment. Just be sure to read the fine print and understand the terms of the offer. I wrote up a plan for how to pay it off by first determining what I could pay each month after all of the bills and other necessities were paid for. I allowed myself very few luxuries during this time period, but I am so glad that I did it!

    You may even be able to just call up your credit card company and just ask if they can transfer your balance to a low apr. That is what I did when I was in school and did not have a job, but needed to pay for things like books, tuition, etc. CC companies can actually be pretty reasonable about these kinds of things; you just have to ask.

    I am not sure how much debt you have, but I agree that you should avoid taking out of your 401k if you can.

    I wish you the best of luck!
    Formerly ladyjag123
  • NotBradPittNotBradPitt Posts: 203Registered Users
    Paying off CC debt should hurt. This way you don't make the same mistake again. I would cut something out of my current lifestyle to pay it off.

    Using a 401K is horrible. Not only are you paying interest with that money, you are losing interest you would be earning by using it.
    Peppy & NBP BFF :blob7:
  • BiancaBianca Posts: 2,492Registered Users Curl Connoisseur
    M2LR & Co. wrote:
    Should I do a balance transfer to one of those 0% cards and just pay as I can?

    A friend of mine did this and ended up with debt on both the new card and the old card from which they transfered the original balance. Then they transfered that balance to another one, then another, then another, etc.

    He's in more debt now than what he started with.
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  • iris427iris427 Posts: 6,002Registered Users
    M2LR I talked to my fiance about this kind of situation. He said it's hard to advise the best course to people without knowing specifics about their financial situation, so you might want to find a financial adviser in your area.

    He said the 0% cards can be helpful but can also really hurt you. Like another poster said, be sure to read the fine print. If not, you can end up worse than before.
    3027585431_55b6195e50_s.jpg3028374752_0df4d81a1b_s.jpg3028422696_8dcef38baa_s.jpg
    TickerTicker.aspx?&TT=bdy&TT1=bdy&CL=29&CT=&CG=F&O=m_nestbirds&T=t_b14&D=20080913&M1=&D1=2009&T2=&T1=Baby+Iris&CC=0&CO=&step=5&radio=A

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