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What should I pay off first

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seanf12
New Contributor

What should I pay off first

Wanted to get some thoughts\opinions on a strategy.  I'm 48 years old, and I am targeting a retirement at age 65.  I won't go into details as to why, but we just bought a house last June at a 2.75% interest rate over 30 years.  I have no car loans.

 

I also have about $15k in credit card debt, along with about $35k in personal loan debt.  The interest rates vary, but looking at the loan\card with the highest rate and making just minimum payments across all tradelines (of course not using the cards or opening more loans), everything could be paid off in 6-7 years.

 

From a compensation standpoint, I am mostly salaried but I do get a quarterly bonus that generally falls in the same range.

 

Along with paying off this debt, my other goal is to have the house paid off by the time I retire.    I built out a debt snowball sheet (with all debts except for my mortgage) as I am able to put an initial $2k towards my loan\CC debt today, and following that sheet, all CC\loans would be paid off in 3 years (The $2k would pay off 5 cards that have a small balance on them as of today).

 

From a compensation standpoint, I am mostly salaried but I do get a quarterly bonus that generally falls in the same range\amount.

 

Question I am grappling with; do I take the money saved by paying off some of these cards and start putting it towards the mortgage each month, and use my quarterly bonuses to pay off debt in chunks, or do I stick to the debt snowball sheet and payoff all personal debt, and then start throwing the extra money saved at the next card (i.e. the traditional debt snowball method)?

 

Thanks!

Message 1 of 4
3 REPLIES 3
DakotaM
Regular Contributor

Re: What should I pay off first

It sounds like you have a good plan already. I would use the debt snowball all the way!  Your mortgage rate is low enough that it should definitely be the last thing to pay down.



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Message 2 of 4
SouthJamaica
Mega Contributor

Re: What should I pay off first


@seanf12 wrote:

Wanted to get some thoughts\opinions on a strategy.  I'm 48 years old, and I am targeting a retirement at age 65.  I won't go into details as to why, but we just bought a house last June at a 2.75% interest rate over 30 years.  I have no car loans.

 

I also have about $15k in credit card debt, along with about $35k in personal loan debt.  The interest rates vary, but looking at the loan\card with the highest rate and making just minimum payments across all tradelines (of course not using the cards or opening more loans), everything could be paid off in 6-7 years.

 

From a compensation standpoint, I am mostly salaried but I do get a quarterly bonus that generally falls in the same range.

 

Along with paying off this debt, my other goal is to have the house paid off by the time I retire.    I built out a debt snowball sheet (with all debts except for my mortgage) as I am able to put an initial $2k towards my loan\CC debt today, and following that sheet, all CC\loans would be paid off in 3 years (The $2k would pay off 5 cards that have a small balance on them as of today).

 

From a compensation standpoint, I am mostly salaried but I do get a quarterly bonus that generally falls in the same range\amount.

 

Question I am grappling with; do I take the money saved by paying off some of these cards and start putting it towards the mortgage each month, and use my quarterly bonuses to pay off debt in chunks, or do I stick to the debt snowball sheet and payoff all personal debt, and then start throwing the extra money saved at the next card (i.e. the traditional debt snowball method)?

 

Thanks!


In my opinion your plan should be to pay off the credit cards first.

Then pay off the non-mortage loans.

Then pay off the mortgage.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 3 of 4
iowe
Regular Contributor

Re: What should I pay off first

Credit cards first. Always credit cards first. 









2024 Goal: To finally be debt free
Message 4 of 4
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