Getting Help with Debt
I am 25 years old and I work full time making about $1900 take home a month. I just had a baby and my husband makes about $1500 take home a month. We oen a house and pay $900 month, we have a car and pay $300 per month. I am about $13000 in credit card debt and another $12000 in student loan debt- I am paying about $600 a month on cc debt alone. We both have very bad credit so we do not qualify for a equity loan or a consolidation loan. I have about $11000 in my 401 k and I am thinking of either cashing out or taking a loan. I dont know what the best one to do is or what else we could do to get out of debt! We are living pay check to pay check and have just enough money every month to get everything we need. What is the best solution to get us out of debt? I am more concerned with the credit card debt then anything else.
Answer:
First of all you will not be able to cash out your 401k unless you quit your job. Borrowing against it to clear debt is just transfering debt. I would recommend that you review a debt reduction program such as that presented by Dave Ramsey or Suze Oreman. Dave Ramsey has a great book called The Total Money Makeover. I would highly recommend that you check it out of the library and read it with your husband.
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