Budget advice

[dakcp2001]

I have always been financially responsible and have never amassed a large amount of debt until now. Two years ago I left my full time career to go back to school, and then halfway through the nursing program my df got laid off. So over the last year or so we have accumulated what seems like an unsurmountable amount of debt. Now that we are both finally working full time again (YAY!!!!! He starts in 2 weeks) I am unsure what to tackle first.

We have credit card debt, a HELOC, and my car is on its last leg. I think his car will last a few more years but mine is really hanging on by a thread. Our home has been on the market unsuccessfully for the last few months, and we relocated so we could both find a job so we have both rent & a mortgage. Renting our home is not an option, we are NEVER trying that again.


So do we snowball the CC debt first, then the HELOC, and just deal with a car loan when the time comes? Or should I put some towards CC some to heloc & some to car savings account each month?

 

[firsttimer2007]

Highest interest goes first!

It is costing you the most.

 

[lizerbug]

And term out your HELOC so you can't advance on it anymore..........

 

[Pembo]

I'd put some on the cc, some to Heloc, and some to save for the car.

 

[firsttimer2007]

I'd put some on the cc, some to Heloc, and some to save for the car.

I have found that it is harder to see an end if you spread out extra payments. Also, the HELOC is probably at a much, much lower interest rate that all of the cc's.

Try to make the car last as long as you possible can. The more you pay off, the better your credit looks, the lower the interest rate on the new car loan.

If you can pay off all of your loans first it would be even better. DTI is something most banks are paying close attention to these days. Your DTI sounds high.

 

[Scampi]

I'd say get rid of the highest interest rate first.

 

[PrincessBelle09]

My suggestion would be to follow the Dave Ramsey plan.

1) Get $1000 in a savings account as your "baby" emergency fund.
2) Pay minimum on everything but the lowest debt amount until you have that lowest amount paid off. Move on the to the second lowest, etc.

3) Since your car is on its last leg, save some money for another car. But right now, you're in debt with rent and a mortgage and (I'm assuming) no savings. You can't afford a car payment and if you're serious about getting out of debt and staying out, you need to be planning to outright buy a car with cash.

4) Once you've paid off the debt, build your baby emergency fund to three to six months worth of expenses.

I highly recommend getting a copy of The Total Money Makeover. =)

 

[richmond282]

I second Dave Ramsey's plan. Check out the "total money makeover" from the library and follow it.

 

[lyncecelia]

Wow....I really want to try this! Definitely going to talk it over with DBF and try to start working towards this....

 

[dakcp2001]

I should also mention that I am kind of down about the fact that we have been engaged for almost 4 years now and would likje to get married. I just dont see how we can afford anything other that city hall, and well, that just is not what we want at all. I feel like we need to get rid of this debt in order to enjoy a wedding (our families live halfway across the country) so anyway you figure it there will be travel involved.

I need to save for a wedding and this just keeps getting pushed to the backburner..

 

[kim532]

I don't think city hall has to be your wedding destiniy if you don't want it to be. There are creative ways to have a cheap wedding. Get married at a park, church or someone's house for free. Have friends and family do flowers and food. Bargain shop your dress.

My wedding in total cost $500 (back 15 years ago, but still).

I think whatever game plan you come up with to get out of debt, you and your DF need to be 100% in agreement with the financial game plan. I have heard money issues are the #1 reason for divorce.