It appears your net income is covering all of the regular bills plus a little extra. That leaves your gf's $2000 net per month to be applied towards the credit card debt. That will get you paid to $0 in ~6 months. You're spending money somewhere that you're not listing. I would suggest looking at the last few months bank statements to see where your money is going.
@Sk323i wrote:
Cox - Cable / Internet $120.00 Electric $60.00 Gas $100.00 Tmobile $180.00 City - Sewer $60.00 Pest Control $30.00 Gym $120.00 AAA Insurance $220.00 Gas for 2 Cars for 1 Month $300.00** Food for 1 Month $300.00 Dental $130.00 TOTAL $1,620.00
Thanks for the details.
$300 per month for food for two people is already eating ramen and rice. No spending on dining out?
Are you commuting a long distance to work? That's a fairly big gasoline bill at $300.
No clothing budget set aside.
Your idea of having $3,000 in emergency funds, is good. You need a buffer on expenses to make sure you make the payments on the cards, and you don't run out of cash at the bank. That $3,000 in cash does have a cost, however, since the cards you are paying have about a 20% APR, so the $3,000 costs you $600 per year for that cash security. This is not intended to convince you to not save the $3,000, just be aware that cash has a cost when you have credit card debt the cash could be applied to.
Is your GF sharing expenses? How are you two approaching this CC debt and the mortgage? Have you two talked through how the mortgage and CC and vehicle debt is to be shared? If you are both clear on sharing, then putting her income toward the CC payments can help to get to zero faster.
As for the approach to the cards, one method is to pay off the Citi AA card as quickly as possible. The reason being it is probably the only card in your lineup where you will expect to see a 0% APR Balance Transfer offer. It is the largest balance, and it will require discipline to get it paid off, but getting that quickly to zero may allow you to pay a 3% BT Fee to pull everything over into a 0% situation, on that Citi card, making it easier to finish off the remaining amounts over the 12 months or so that you will have 0% APR. On the other cards continue making minimum payments on time, of course, until each is zero.
There is also something to be said for the Snowball approach, starting with the smallest balances first, paying that off, then applying more monthly payment to the next higher balance. If all cards are at high APR, and there are no BT possibilities, then the snowball approach is the easist to work with.
Regarding your question on settling with the card companies, not something I would even consider. You and DGF have the cash income to tackle these debts. It takes time and watching expenses, but you don't want to start adding more negatives to your credit report. It seems you already went through a settlement a few years ago. For your long term financial health, it's best to understand your expenses, do your best in your career, and try to keep your spending under your income. It is not easy in a society that pushes consumerism and wants you to buy everything in sight, but it is necessary to your long term goals.
No mention of a 401(k) or IRA savings, but that is another area where you should start setting aside funds for the long term.
Good luck!
