Pay off Cc's or invest?

[amylevan]

I'm going to differ slight from the masses here...you can usually put a little money away in your 401k and not see a major decrease in your take home pay since it is not taxable. You need to do a little work to figure out what that amount is, but it's better to be socking it away in your 401k than paying taxes (i.e. turbo tax suggested we up our 401k contribution a few years ago a few percentage points and we barely saw a difference in our take home pay). It may be only 1%, but that's 1% that you'll have later. So I would suggest you put a little away in your 401k and than focus the rest on your debt.

 

[bettymae1121]

Since there is no match and you have 30 years until retirement, I'd go full tilt boogie on the CC debt. Unless it's going to take a person more than say, five years, to pay off debt, it's almost ways better to suspend retirement saving for a short period of time to get rid of debt rather (unless there is a match, then contribute enough to get the max match but put the rest towards debt repayment).

 

[bettymae1121]

It was dumb because we refinanced with a lower interest so the home equity got rolled into our mortgage and we're now paying it off in 30 years as opposed to just a few. In addition, with the way the market is, we not longer have a lot of equity like we used to. If we sold now we would only have $70K to put down on a new house as opposed to 100K.

Live and learn I guess.

Once you pay off the CC debt, you can easliy up the payment on your mortgage to shorten it to a 20, 15, or even a 10 year repayment if you wanted to! There are online calculators that can tell you how much to increase your home payment by to shorten your mortgage term. Personally I would only bother if you planned on staying in the home for a really long time, but if this is your forever home, it's a great way to save a lot of money on interest.

 

[ccgirl]

Great suggestion, thanks BettyMae. I will have to search for the calculator.