Re: Making sense of paying of CC debt with a 401k (like) distribution
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Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date
Re: Making sense of paying of CC debt with a 401k (like) distribution Elizabeth Richardson 02-29-2008
Posted by Elizabeth Richardson on February 29, 2008, 4:07 pm

>
> I have $13000.00 in cc debt that I would like to pay off by
> withdrawing this amount from my new account.
>
> I understand that I would pay a 10% penalty plus the extra income tax
> hit BUT once those cards are paid off my cash flow will increase by
> $300.00 a month (since I wouldn't have cc payments anymore). I like
> the idea of being out of debt

What is preventing you from making payments greater than $300 per month so
that you could pay this off quickly out of regular income?

Elizabeth Richardson

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Posted by on March 1, 2008, 1:01 pm
On Fri, 29 Feb 2008 15:07:07 -0600, "Elizabeth Richardson"


>
>What is preventing you from making payments greater than $300 per month so
>that you could pay this off quickly out of regular income?
>
>Elizabeth Richardson

Well, we have 2 car payments and a mortgage and the wife also has CC
debt (not as much as myself though; about $6000.00) plus we like to do
things in our lives that cost money (Vacations entertainment etc). But
I understand about living within our means though--I just don't
practice what other's preach though<g>.

I should have also stated initially that we have been married for
less than a year now so there is a period of adjustment one goes
through when combining incomes. As she earns more than I do, it's kind
of a balancing act when it comes to our individual debt from before we
were married. We do split all joint bills though, but the CC debt from
our former single lives should be our own responsibilty and I don't
really think it's fair for her to pay my old debt; so that is why I
would like to get back on track.

But yeah, I realize it's probably a dumb thing to do but I like the
feeling of a clean slate debt wise. The trick is to not get back on
that merry-go-round once I get off of it (if I do decide to do it)

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.


Posted by Elizabeth Richardson on March 1, 2008, 5:11 pm

>
> Well, we have 2 car payments and a mortgage and the wife also has CC
> debt (not as much as myself though; about $6000.00) plus we like to do
> things in our lives that cost money (Vacations entertainment etc). But
> I understand about living within our means though--I just don't
> practice what other's preach though<g>.
>

Well, it sounds to me like you simply want less of the debt you have so
that you can go into debt on something different. This doesn't make good
financial sense.

Elizabeth Richardson

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.


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