Question

Hi all, I’m totally new to this but am trying to get our money in our control. Unfortunately, my husband and I racked up a lot of CC debt while I was in nursing school and our first son was born in Nov 2018. I am just getting into my RN job and we just found out baby #2 is coming in October. We have $7500 tax refund to utilize and I want to make sure it gets put where it is best used. We currently have $1, 064 in an EF. Here are our smaller debts (excluding mortgage and cars) $6, 284. 40 @ 24. 99% APR $4, 662. 70 @ 24. 99% APR $4, 100 @24. 99% APR $1, 200 ATV loan @3% APR $1, 600 @ 0% APR $600 @ 0% APR What is the best way for me to go about paying off our debt with our refund? I appreciate all advice!  

Answer 1

Highest interest starting with the lower of the 3 and going up from there.  

Answer 2

What are the minimum payments on the top 3 and when do the bottom 2 0% expire? I would make sure you are paying enough per month on the bottom two to knock them out before their interest jumps and I would pay off whichever top one frees up the most money.  

Comments

@hauteur the top 3 each have a min payment of $130. Both 0% cards I could get by paying min payments before the interest kicks in.  

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I would evaluate what you need to put away for the new baby as far as medical bills and baby gear and then knock out one of the top 3. Ideally the biggest but paying off anything is a huge step.  

Answer 3

We do the snowball effect and the Dave Ramsey method.  

Answer 4

I would pay off the 3 lower and then roll those monthly payment you would normally make into the other payments. The snowball method

Answer 5

I would pay off the highest loan at the top and the atv loan and than snowball the rest.  

Answer 6

Fellow nurse here, keep in mind your PTO/Vacation/SICK bank may not be available if you havent been employed for a year, I'd be sure to look into that aspect.  

Answer 7

I’d get rid of the big one, apply the rest to whichever $4000 loan you’re most sick of, and then hit that one hard with the avalanche method.  

Answer 8

I would leave your EF alone, then I would pay off the 6284. 40 then apply the 1215. 60 to the 4662. 70 and go from there. That would leave 3447. 10. Then I would continue to use any savings additional savings (not your EF) to pay it off quicker and use the minimum payments you were paying from the top one. Then I would tackle 4100, then 1200, then 1600 and then finally 600. Every minimum payment you had once something is paid off needs to be snowballed into the next one.  

Answer 9

I’d pay the lower 3-4 and then apply those payments to the remainder and attack them !  

Answer 10

Highest interest first

Answer 11

I would throw another 1, 000 at your ef. What would free up your highest minimum payment? That’s whah I would try and attack first. Which is technically not snowball or avalanche but in your situation would make the most sense.  

Answer 12

Highest interest if mulitple the highest amount

Answer 13

Avalanche method

Answer 14

Can you provide minimum payments for each?  

Answer 15

The biggest and highest debt ($6200) will continue to build the highest interest on a month to month basis. so get that gone. Then, I would round out the EF to $2000. With the remainder, I would pay off the $600 account, for the psychological boost of saying, "We totally paid off two accounts! "

Answer 16

Debt snowball is what has been working for me. Paying off the smaller debt has given me hope that I will pay off the bigger one! Anyway you do it will work because you will see those balances getting smaller!  

Answer 17

Since there are three with 24. 99 apr, I would throw it at the two 4K ones. Knock one of them out and then have very little left on the other 4K. You can snowball the original payment you no longer have into the rest of the left over 4K and get rid of it in a couple months. Once both 4K ones are gone, I would snowball the payments for the cc’d you paid off into the 6k one! Def leave the 3% and 0% until you have all 24%aprs paid off!  

Answer 18

Avalanche it. Pay off the highest with highest interest rate then keep moving down the list that’s the one that will cost you the most to keep around

Answer 19

Smallest to largest. little wins turn into big wins quicker! That would knock out 4 debts! Then you could send extra to next and knock it out in no time!  

Comments

@rhapsodize SNOWBALL those debts! Get some small wins and use those payments towards the other debts.  

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Snowball smallest to largest!  

Answer 20

Pay off the $6000 one and rest in EF I wouldn’t pay off the 0% apr ones yet

Answer 21

I would do the 16, 12 and 41 because the 600 is the easy one. You would have 3 gone and you’d be able to pay the 600 down to an easy oneish payment. Or put the balance towards your EF to build that more. What ever you chose you can’t go wrong  

Answer 22

Pay off the (2) 4K's.  

Answer 23

Well I’ve tried both the debt snowball and debt avalanche and I personally prefer the debt snowball. I got so discouraged and fell off track when I did the debt avalanche. I’d pay off the $600, 1, 600, 1, 200, and the 4, 100. You have 7500 and that will cover all 4 of those and then you are down to just 2

Answer 24

I have done the highest interest and then things like the snowball. The snowball helped me feel like the debt was disappearing. Helped me want go on to the next bill.  

Answer 25

I would either: pay off the highest, put what’s left to the next highest, or pay off the 4 smallest debts and use that monthly combined minimum of what you paid for those to snowball the other two.  

Answer 26

I would personally save $1000 and throw the rest at $6284. 40. Then snowball the rest.  

Answer 27

Have you considered trying to transfer the balance to a zero interest card on the cards with the most interest ?  

Answer 28

So I personally do a combination of paying off highest debt first and smaller. Just depends on how much money I have to through at things. You have enough to pay off a big debt with a higher interest. $6k pay that off then pay the $1, 200 off because it’s smaller with interest rate. Your spending majority of your payments on interest on the first card. With what you pay on interest will help clear your 0% interest debts off quick.  

Answer 29

Look into the debt calculator, it can help you figure out which method (snowball or avalanche) can help you pay less in interest overall. For us, the avalanche saves us more

Comments

@diella Mace I personally like the avalanche better also! If I had a chunk of money I would put it towards the highest interest. Is it less per month if you pay off the 2 with 24. 99% apr or is it cheaper to just put it towards the 6284? Then I would pay off the higher interest credit cards roll over the money you were paying to the rest of them.  

Answer 30

Personally I would get rid of the bottom 4. I know they are low interest in comparison but that is 4 payments you can free up to put toward the other two

Answer 31

Kill off those high interest loans as fast as you possibly can, my friend. And hey, congratulations on being a newly minted nurse! It is a tough gig but totally worth it  

Answer 32

What are the monthly payments on each? Are the bottom two 0% for the life of the debt or only for a certain period of time?  

Answer 33

When do the 0% ones expire? Are you paying enough each month to pay those off in time? If so, I'd pay off at least 1 of the $4k CCs, and depending on what the payment is on the ATV, pay that off (if the payment is more than one of the 25% CCs I'd pay it off), or put as much into another 4k CC and snowball that one, then move onto the $6k one.  

Answer 34

If this was my scenario, I would pay off the bottom four because I like the instant gratification of paying off so many at once. Then you can take the minimum payments you would pay from those four and roll them on top of your minimum payments for the other two to pay them off faster.  

Answer 35

I would definitely pay off the last 3 debts. They're small. Get rid of them. Then put the remaining refund on the first debt on the list. And include an it's traditional monthly payment along with the monthly payments of those small bills you paid off. Good going! EXCELLENT REFUND‼️

Answer 36

Tip:. I work for the IRS. You're clearly paying too much tax. If you would like to increase your take home pay, instead of receiving a large refund, you can decrease your withholdings. If you prefer large refunds, keep everything as is.  

Comments

Agreed. I'd be changing that. no sense in the IRS getting to keep that money through the year. js

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@nondisjunction I wish more understood this!  

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@goddard Same!  

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@nondisjunction can I message you? I was wondering all this around tax time  

Answer 37

Pay off bottom 4 debts. Roll that $$ into paying off the other two. Then pay off cars and house. All in that order

Answer 38

I would knock out that first one completely and then put the remainder on the next largest. The low interest rates aren't really anything money wise, so getting those large interest rates payed off will keep you from paying a ton in interest.  

Answer 39

Personally i would knock out the highest one then pay off the $600. 2 debts completely done.  

Comments

Also call the credit card companies and ask for an interest rate reduction. 25% is insane.  

Answer 40

Clear the bottom two. Put a chunk to the top. And whatever you paid monthly to the bottom two, put towards the lowest amount monthly.  

Answer 41

Knock out the biggest one and the small one and the rest towards the other 0% item. I’m sure the 0% will be over at some point so better to not pay any interest on those at all and get rid of them.  

Answer 42

Pay off last 3 first.  

Answer 43

I'd do 6284 and then the extra on the 4100. Then I would combine the rest of the 24% to a personal loan with lower interest. That interest is so high so I'd definitely attack those first. The interest alone in the 24% will cost you FAR more than the lower interest debt combined.  

Answer 44

What are the minimum monthly payments on each? Then I can tell you my opinion.  

Answer 45

Smallest 4 and snowball payments from there

Answer 46

If you don’t get paid maternity leave, could you throw $1000 into a SF and use the rest for the 4100 and 1200 etc?