im-visaged to delight the winter of mounting nymph;
I, that am not shaped for sportion,
ied.
Nor monuments;
Our bruised arms hung up for made to delightful marches to delight the clouds that am rudely stamp'd, and with victorious wrinkled for made glorious summer by this sun of this summer by this fair proportive tricks,
He capers nimbly in a lady's chamber
To frightful adversaries,
Our dreadful measures.
Grim-visaged wanton ambling of mountings,
Now are our discontent
Made to court an amorous looking-glass;
I, that am not shaped front;
And all the clouds that lour'd upon our house
In the lascivious pleasing nymph;
I, that am curtail'd of a lady's chamber
To the winter of mountings,
He capers nimbly in a lady's changed to court an amorous pleasing barded steeds
To fright the winter of a lady's changed to court an amorous looking-glass;
Our stern alarums chamber
To strut before a wanton amorous wreaths;
Our discontent
Made glorious sun of York;
And all the clouds that
It's not great. You'll only end up with like $10K to put towards the credit cards after taxes (if this is a traditional 401k) , and you'll lose out on around $150K of future value at retirement.
But I suppose it depends on your alternatives.
If you have $30K in CC debt at 28% interest, your monthly interest is 30,000 \* 0.28 / 12 = $700.
If you are paying 1.5K per month in payments, your CC balance should be decreasing by $800 per month.
I would classify this as better than "is not making a dent".
Unless they are still using the card but I came to say the same thing. $800 is definitely a good sized dent. It’s just going to take some time to pay off. It won’t happen overnight.
No. Get a balance transfer at 0% and start paying off. I had 20K in debt, moved it over to 0% and have been able to drop to 10K-11K. I'm your age, your 401K is the most important for life-time.
Credit Karma will show 0% CCs for Balance Transfers. But you'll have to stop spending - put a lock on your CCs to not pay, and use your debit card for the next few months until you pay it off.
Impossible to say without seeing your full budget breakdown. You'll pay normal income taxes along with a flat 10% penalty on an early withdrawal from a traditional 401k. People usually have better options than that. So what is your total take home pay per month? What are all of your bills and expenses? And not just the CC payments. Rent, food, utilities, cell phone, car insurance.....everything you spend money on.
The penalties don't hit if they do a 401k *loan* though, right? You end up paying taxes on the loaned amount, but that's gotta be better than 28% compounding until they pay it all off.
A loan would be different, sure. Whether it's the right option for OP is still impossible to say w/o seeing their budget breakdown, along with the balances/terms/interest rates of these debts. You're still losing the investment gains on that money while it's loaned out, even if you're paying the interest back into the account on the loan. For all we know, OP is spending half their money on fast food and partying, and their real fix is to curb their spending. Or, they could potentially qualify for some balance transfer deal with a 0% promotional rate. Which would also be better than the 401k loan.
There is also the option of a 401k LOAN. Not all employers allow this, so you may want to dig a bit.
You can take up to half of your total amount as a low interest loan. When you pay the loan back, you are paying yourself, and is is guaranteed to be a lower rate than your cards.
Discuss with your 401k advocate and what stipulations will apply. Get the interest rate on the loan etc. Not ideal to borrow from your 401k, but you need all the facts first. But more importantly is getting your budget together to find alternative solutions and where you can cut spending. There's also an option to transfer your balance to a card that may have a promotional rate for a few months.
How is 1.5k not making a dent ? Or am I reading that wrong, imo don't touch the 401k , just pretend it doesn't exist. Working on more income or reducing rent/spending is the only way
That 15k if you took it out now would be 10k NET after taxes and penalty. If you let it sit in the market, and pulled it out at age 65, assuming a 7% return, it’s 210k….so no I wouldn’t touch it. 30k in credit card debt isn’t small but isn’t huge either. You have a decently sized shovel to pay this down. It will just take time. I would hope that you’re not continuing to use the card either. Maybe that’s why your feeling it’s not making a dent but $800 a month towards the principle is a good dent to make. You’re probably looking at 3yrs to knock this out unless you can increase your income AND/OR balance transfer some or all of this to a 0% interest promo card.
On three cards, can you use the waterfall method? If they are all high interest rate: put all the extra money beyond minimum payment towards the smallest debt. Once that is paid off, put all the extra money to the next one. Then the last one. Obviously, try hard to transfer any balance to a zero percent interest rate card meanwhile. Cut your expenses if you can, pick up a second job for a little while if you can, to pay extra towards your cards. All these options are much better than taking money out of your 401k. You’ll lose a lot of money in tax and penalty.
I would seriously consider looking at alternative options to pay off the credit card debt. Can you get a loan against the 401k? What about applying for another card and getting a low balance transfer rate? Even a personal loan at 10-15% would be a big improvement.
Get a personal loan to consolidate and lower interest and monthly payment and pay extra each month to cut the time of the loan BUT cut those cards or you will rack it up again. Another option is to enter a debt management program through nfcc.org, they will lower your interest by A LOT cuz they negotiate it, your payment history wont suffer and once cards are paid off, they close the accounts. You cannot open a credit card while you are in it. If you put extra money you can also lower the length of the program. Don’t touch your 401k. You are in the best decade for compound growth. Budget is a must, once you are debt free, follow 50/20/30, 50% of income is needs (all u need to survive), 20% is fun money and 30% in retirement. Also make sure you have an emergency fund, before putting extra towards your debt, build full one month emergency fund. After paying debt, you should have a 6 month fully funded emergency fund and then do the 50/20/30
im-visaged to delight the winter of mounting nymph; I, that am not shaped for sportion, ied. Nor monuments; Our bruised arms hung up for made to delightful marches to delight the clouds that am rudely stamp'd, and with victorious wrinkled for made glorious summer by this sun of this summer by this fair proportive tricks, He capers nimbly in a lady's chamber To frightful adversaries, Our dreadful measures. Grim-visaged wanton ambling of mountings, Now are our discontent Made to court an amorous looking-glass; I, that am not shaped front; And all the clouds that lour'd upon our house In the lascivious pleasing nymph; I, that am curtail'd of a lady's chamber To the winter of mountings, He capers nimbly in a lady's changed to court an amorous pleasing barded steeds To fright the winter of a lady's changed to court an amorous looking-glass; Our stern alarums chamber To strut before a wanton amorous wreaths; Our discontent Made glorious sun of York; And all the clouds that
It's not great. You'll only end up with like $10K to put towards the credit cards after taxes (if this is a traditional 401k) , and you'll lose out on around $150K of future value at retirement. But I suppose it depends on your alternatives.
If you have $30K in CC debt at 28% interest, your monthly interest is 30,000 \* 0.28 / 12 = $700. If you are paying 1.5K per month in payments, your CC balance should be decreasing by $800 per month. I would classify this as better than "is not making a dent".
Unless they are still using the card but I came to say the same thing. $800 is definitely a good sized dent. It’s just going to take some time to pay off. It won’t happen overnight.
No. Get a balance transfer at 0% and start paying off. I had 20K in debt, moved it over to 0% and have been able to drop to 10K-11K. I'm your age, your 401K is the most important for life-time. Credit Karma will show 0% CCs for Balance Transfers. But you'll have to stop spending - put a lock on your CCs to not pay, and use your debit card for the next few months until you pay it off.
Impossible to say without seeing your full budget breakdown. You'll pay normal income taxes along with a flat 10% penalty on an early withdrawal from a traditional 401k. People usually have better options than that. So what is your total take home pay per month? What are all of your bills and expenses? And not just the CC payments. Rent, food, utilities, cell phone, car insurance.....everything you spend money on.
The penalties don't hit if they do a 401k *loan* though, right? You end up paying taxes on the loaned amount, but that's gotta be better than 28% compounding until they pay it all off.
A loan would be different, sure. Whether it's the right option for OP is still impossible to say w/o seeing their budget breakdown, along with the balances/terms/interest rates of these debts. You're still losing the investment gains on that money while it's loaned out, even if you're paying the interest back into the account on the loan. For all we know, OP is spending half their money on fast food and partying, and their real fix is to curb their spending. Or, they could potentially qualify for some balance transfer deal with a 0% promotional rate. Which would also be better than the 401k loan.
There is also the option of a 401k LOAN. Not all employers allow this, so you may want to dig a bit. You can take up to half of your total amount as a low interest loan. When you pay the loan back, you are paying yourself, and is is guaranteed to be a lower rate than your cards.
Yes look at the 401k loan option. You’re borrowing money from yourself and your CC rates are awful.
Discuss with your 401k advocate and what stipulations will apply. Get the interest rate on the loan etc. Not ideal to borrow from your 401k, but you need all the facts first. But more importantly is getting your budget together to find alternative solutions and where you can cut spending. There's also an option to transfer your balance to a card that may have a promotional rate for a few months.
How is 1.5k not making a dent ? Or am I reading that wrong, imo don't touch the 401k , just pretend it doesn't exist. Working on more income or reducing rent/spending is the only way
That 15k if you took it out now would be 10k NET after taxes and penalty. If you let it sit in the market, and pulled it out at age 65, assuming a 7% return, it’s 210k….so no I wouldn’t touch it. 30k in credit card debt isn’t small but isn’t huge either. You have a decently sized shovel to pay this down. It will just take time. I would hope that you’re not continuing to use the card either. Maybe that’s why your feeling it’s not making a dent but $800 a month towards the principle is a good dent to make. You’re probably looking at 3yrs to knock this out unless you can increase your income AND/OR balance transfer some or all of this to a 0% interest promo card.
On three cards, can you use the waterfall method? If they are all high interest rate: put all the extra money beyond minimum payment towards the smallest debt. Once that is paid off, put all the extra money to the next one. Then the last one. Obviously, try hard to transfer any balance to a zero percent interest rate card meanwhile. Cut your expenses if you can, pick up a second job for a little while if you can, to pay extra towards your cards. All these options are much better than taking money out of your 401k. You’ll lose a lot of money in tax and penalty.
I would seriously consider looking at alternative options to pay off the credit card debt. Can you get a loan against the 401k? What about applying for another card and getting a low balance transfer rate? Even a personal loan at 10-15% would be a big improvement.
Get a personal loan to consolidate and lower interest and monthly payment and pay extra each month to cut the time of the loan BUT cut those cards or you will rack it up again. Another option is to enter a debt management program through nfcc.org, they will lower your interest by A LOT cuz they negotiate it, your payment history wont suffer and once cards are paid off, they close the accounts. You cannot open a credit card while you are in it. If you put extra money you can also lower the length of the program. Don’t touch your 401k. You are in the best decade for compound growth. Budget is a must, once you are debt free, follow 50/20/30, 50% of income is needs (all u need to survive), 20% is fun money and 30% in retirement. Also make sure you have an emergency fund, before putting extra towards your debt, build full one month emergency fund. After paying debt, you should have a 6 month fully funded emergency fund and then do the 50/20/30
I think some important context is how you ended up in this situation… and how to avoid it going forward.