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I paid off all three credit cards earlier in the year. Then set about setting up an emergency household fund. I don't have a lot of room for savings, but I worked at it for the last 9 months very hard and got it to 1500 dollars. It was a cash fund not one in a bank. I have other money in two different accounts. Not much, but some. So, this was the emergency household money. I always feel really good watching the fund physically increase. I keep it in a locked bank cash bag. But, I also took a trip, paid for college classes and other things and paid them on the credit card. The credit card was at 1000 dollars this morning. I know it was best, so I paid it off. But I'm sad the savings isn't there any more. :(
At least you had it so you could pay the bill and not have to pay any interest. i know that is small consolation when you worked so hard to save, but it will help you rebuild more quickly.
So if you saved 1000 in 9 months, can you set yourself a target of adding at least 100 back into the cash stash every month? Sell off anything you don't need, use coupons and rebates, maybe sign up for some cash back credit card offers (if those don't scare you)? Having a goal might help you build it back up more quickly, and make it more fun than drudgery.
good luck and be encouraged -- paying off your cc balances is HUGE! If you can do that, you can do anything. Onward and upward!
Blackdog Lin
5-7-13, 8:44am
Of course you're sad.....but that's why you instituted the emergency fund in the first place, yes? So you would never get into the credit card consumer merry-go-round cycle of debt again, yes? Congratulations on your common sense savings plan. Keep up the great work!
Way to go! You saved, you paid off (with out any monthly fees) and you can save again!
Good job!
At least you had it so you could pay the bill and not have to pay any interest. i know that is small consolation when you worked so hard to save, but it will help you rebuild more quickly.
So if you saved 1000 in 9 months, can you set yourself a target of adding at least 100 back into the cash stash every month? Sell off anything you don't need, use coupons and rebates, maybe sign up for some cash back credit card offers (if those don't scare you)? Having a goal might help you build it back up more quickly, and make it more fun than drudgery.
good luck and be encouraged -- paying off your cc balances is HUGE! If you can do that, you can do anything. Onward and upward!
I wish. I get close, but I also have a pretty small income and not a lot of wiggle room, but 100 a month is about as close as I can get. Anything more and I don't really get through the pay period. I don't believe there's a thing I own worth selling. Except perhaps this computer.:|( Not that it would net much. Unlike most people, I have very little of worth. I have a 20 year old car, a computer and an old model digital television set. Just the one. I don't even own a radio, and that's about it. My furniture comes from a salvage store as do a lot of my clothes. I rent my home. I don't have anything to boast of at all. I do own my vintage salad spinner though!;) In fact, I always marvel when people say sell stuff. Sell what I ask? Everything I have is second hand. But I appreciate the encouraging remarks. That's why I posted this, I needed the encouragement.
Way to go! You saved, you paid off (with out any monthly fees) and you can save again!
Good job!
It was that 30 dollar interest fee that set me over to bite the bullet and deposit the money so I could pay it off.
I love seeing a credit card paid off. It's my favorite. :D
I love seeing a credit card paid off. It's my favorite. :D
Interest charges the credit card company doesn't get to see. I appreciate the support.
You'll save up again. I understand the pinch/frustration of that!
Of course you're sad.....but that's why you instituted the emergency fund in the first place, yes? So you would never get into the credit card consumer merry-go-round cycle of debt again, yes? Congratulations on your common sense savings plan. Keep up the great work!
yeah but a trip/school/etc isn't an emergency. its stuff you have separate savings to pay for those things. an emergency fund should be for if you lose your job and need to survive. just my opinion.
I had to take $4000 out of my savings account for a down payment for my car and that felt like a big blow because I worked really hard to save that money! But I have to remember it was the car I was saving for, in part, because I knew I was going to have to replace my well-worn '97 Honda sooner rather than later. I too, just hate psychologically to see that bank balance one has struggled and sweated to get go down in one fell swoop, just like tha!
My big goal is to rebuild my savings account AND try to pay down the car loan early. I am currently devising ways to earn more money, but not at the expenses of taking a much-needed vacation next month. I try not to be too much of a miser, just smart in what I choose to spend my money on.
I have been pondering finally paying off our CC's, and have a question. I have a very small retirement fund through TIAA CREF, from some years ago. I have considered cashing it out to pay off our CC debt. Is this crazy? Sadly, it's my only retirement savings, and we could conceivably replenish it with the payments we're now making to the CC debt. FWIW, I am expecting a modest inheritance in the next 10 years. That will be my sole retirement fund if I cannot save more. Well, that & my younger husband...
The other variable is that my contract job may be ending, and I have no other income right now. My husband's salary will not support both of us. Eliminating those monthly payments would go a long way towards us living more frugally, but if I have no income, we won't be able to replenish the retirement fund. Obviously I am looking for other work. I have been waking up several nights a week for many years worrying about $$, and the medical bills from my cancer diagnosis will be about 20K this year, which we do not have either.
I am applying for assistance with the med bills, and we shall see if I am eligible. Perhaps losing my income will make me eligible. Should we consider bankruptcy? Does one lose one's home & car? Our mortgage is underwater, but the payments are affordble, for Seattle, anyway, and moving is not preferable. Our car payments are reasonable too. Oy vey... thanks in advance for any suggestions.
PS - Just spoke w/TIAA CREF. I can withdraw it all minus 20% for taxes. IRS may penalize me for early withdrawal at 10%, but that could be reversed for medical emergencies. Will call IRS next! And we're considering talking with an accountant about all this... but any advice is welcomed.
ApatheticNoMore
5-14-13, 3:28pm
PS - Just spoke w/TIAA CREF. I can withdraw it all minus 20% for taxes.
and would it be tax free if you wait until whatever retirement age is considered for it? (like a Roth) If so you're looking at as much as a 30% penalty - really ugly. Or would you owe the taxes at some point (after retirement age) regardless?
IRS may penalize me for early withdrawal at 10%, but that could be reversed for medical emergencies.
that's a serious hit, even just the 10%. Of course credit card interest can easily be that much, and if you can get out of it for medical it's another story. Yes, my bias is taking early withdrawal from retirement accounts is generally a bad idea. Due to all the taxes and penalties - they can really eat up the money.
and would it be tax free if you wait until whatever retirement age is considered for it? (like a Roth) If so you're looking at as much as a 30% penalty - really ugly. Or would you owe the taxes at some point (after retirement age) regardless?
that's a serious hit, even just the 10%. Of course credit card interest can easily be that much, and if you can get out of it for medical it's another story. Yes, my bias is taking early withdrawal from retirement accounts is generally a bad idea. Due to all the taxes and penalties - they can really eat up the money.
To the first question, no, as it was pre-tax in the first place, so the 20% held back will happen regardless. My income is pretty low, and with the exorbitant med expenses -- more than half my take home this year -- my taxes will likely be low too. DH & I are running the numbers to file married seperate.
Yes, the 10% is a hit. I think the savings in CC interest is the counterbalance, plus the peace of mind of closed CC accounts! Next call is to the IRS.
I think that checking it out and see how it balances out is a good idea.
A friend of mine had a burden of debt hanging over her head and was very frustrated by it all. I told her just to pay it off with her retirement, and she freaked. While the numbers didn't add out "break even" -- the peace of mind would be worth it for her. So, after weighing on it a bit more, she paid of the debt with her retirement, and has since been able to pay her retirement back doubt (both the debt payment AND her normal retirement payment goes into the retirement). So, she feels a lot better for it, and she's better off financially for it too.
And, it allowed her to move forward.
I would say with the medical expenses, you might just want to be rid of the debt as quickly as you can -- so long as you don't get back into it again -- and move forward from there.
I would say with the medical expenses, you might just want to be rid of the debt as quickly as you can -- so long as you don't get back into it again -- and move forward from there.
Not sure how to do this! I didn't predict cancer, and cannot change my medical policy without a 9 month waiting period of no coverage for any current condition. So I am pretty much stuck with what I have, which is a stop-loss of $14,500 per year, and $3300 annual payments. My treatments this year have already exceeded $50,000, and I am not done yet.
I spoke with the IRS today, and due to medical bills, am exempt from the 10% penalty - she gave me the publication number & rule references, which I read. We'll still consult an accountant. I am verifying that the 20% tax held back by the fund is the case no matter when I receive the income, as it was pre-tax & entirely employer contributed. If this tax is standard, I'll likely cash out this fund for bills. It sucks, but at least it's there.
And, I am looking for work again. The small non-profit I consult for is running out of cash, and unless the board gets there act in gear, we'll be unable to pay staff as of 1 July. It may be time to get into the for-profit sector. I am awake at 1:00 am worrying about money -- again. Oy vey. Does anyone actually hire 58 year old people?
rosarugosa
5-15-13, 4:55am
I hired a 59 y.o. woman a couple of years ago. It would be great if you could get a position with employer-sponsored health insurance. So sorry you are dealing with this!
I wasn't really talking about how to manage the medical expenses/etc, but just that it might be worthwhile to drain this retirement fund to pay off as much debt as you can, so that you can focus on paying the medical bills and building up retirement as best you can as you feel healthy and confident in your ability to work.
and I would, if i were hiring people. :)
and I would, if i were hiring people. :)
Thank you!
rodeosweetheart
5-15-13, 2:40pm
Absolutely, people hire 58 year olds. I got hired full time at 55 after not having a full time job for 30 years. So yes, it will happen for you. My husband got a full time job at 57-- and the best job he has ever had.
Loving the encouragement here. And, I did some 3 am calculations this morning... We'll be ahead by paying off debt with this cash-out. Still running the process by our accountant, and double checking it all. I think it is a go. Plus, in convo with my board president about what the board can do to make sure I can still get paid according to my contract. Nice to get support.
Don't be sad! I know the feeling. I just got a job and those few paychecks I wanted to treat myself, however the debt hanging over my head made it impossible to enjoy. So I have been paying everything back, med bills, cc's, fees etc. I feel for you however it will get better!I just paid off more bills and I am almost there-closer to financial freedom! It feels wonderful. Don't get stuck on it, keep the ball rolling.You will find more ways to save!!Congrats!
Paying all your 3 credit card is really a good achievement cause me i never been yet accomplished to pay some of my debt.In fact in my country i still have a luottotiedot (http://sergel.fi) or credit and it is still a long years before i will finish paying it but hopefully i will save money and pay it once and reduce the day of paying it.
ToomuchStuff
8-20-13, 12:18pm
Yet again with the spam/link.
Yet again with the spam/link.
I complained about that once to TPTB. Nothing happened. It's almost always a necropost and it always includes a spam link or two.
If you're considering paying your cc bills with retirement cash-outs, it's time to talk to a bankruptcy attorney and see what the deal is. Those are difficult choices but yikes, 58 and cashing out retirement? Your only retirement? CC bills will be forgiven if necessary, and cc companies and medical places can sometimes/often negotiate (esp if the other option is bankruptcy and you will give them nothing). But nobody but you can pay your retirement, and if you have a forced early retirement due to health or job problems then what? Not sure if you've already gone through with this or the accountant talked you out of it or what, but that's my two cents. Best of luck.
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