I’m 28 years old, make $65k a year ($3,800 take home monthly) and live with my girlfriend in Los Angeles, CA. My company matches my 401k contribution every paycheck at 4%. Credit score is currently at 640-650. I’ve been helping my parents out financially the last couple of years because they are going through hardship financially, and unfortunately that has put me in debt as well. I’m approaching the next stage of my life with no savings and want to start saving as much as I can for engagement, wedding, house, and children. But that seems like a tough thing to do right now with the debt I listed below. What are everyone’s thoughts on how I should pay off my credit card debt the most efficient/quickest way as possible? My ultimate (and realistic) goal is to payoff all credit card debt by mid-2020, but any advice on how to do it even sooner would be great!
- Credit Card A: $12,400 @ 16.74%: minimum monthly payments are usually $230~ (called for a lower interest rate but got denied). Currently throwing $700/month at this card.
- Credit Card B: $4,600 @ 20.74%; but is currently at a promo rate of 0% until April 2019. Currently paying the monthly minimum of $25.
- Credit Card C: $520 @ 20.99%; currently paying the minimum monthly of $25.
- Credit Card D: $980 @ 0% until January 2020. Currently paying $65/month to avoid interest when the promo expires.
- Auto Loan: $316.05/monthly with 3 years left. I heard Navy Federal CU doesn’t re-finance so might look to re-finance somewhere else.
I get December bonuses of $2k every year and tax refunds in the spring at about $1k (both of which will go toward Credit Card A).
Current total monthly payments: $1,066
Below are the list of my other monthly expenses:
Utilities (Gas, Electric, Internet): $50
Gym Membership: $33
Gas for Car: $200
Fun Money: $200 (this one is a tough one when being in a relationship. But fortunately my girlfriend understands as she has her student loans to pay off as well.)Current living expenses total: $1,428
Emergency Fund: $200/month
Savings Account: $200/month
I’ve been flipping my old items on OfferUp and have done the Postmate/Uber thing (but don’t want to run my car to the ground) for extra moolah. Extra income ranges from an extra $200-500 month.
So I have three major questions (and any other advice would be much appreciated as well!):
- Which credit card do I pay off first? Right now I’m putting all my extra money at Credit Card A. It’s the biggest balance and I’m tired of looking at the large number!
- Should I start putting more than the monthly payment at Credit Card B since the 0% APR promo rate is ending in about 6 months?
- Should I hold off on putting money into my savings account until I pay off my credit card debt or continue throwing $200/month at it? I want to get my emergency fund up so I’m throwing $200/month at that and will continue to. I recently had to get $2k worth of repairs to my car and charged it to Credit Card B ☹
Thank you for taking the time to read this and I’m curious what everyone’s takes will be!