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For the next two months, I am thinking about stopping my 401k contributions so that I can pay off my credit card balance sooner. Come March, I will resume my 5% contributions. By stopping my contributions, I can increase my cash flow and pay off the credit card balance in Full by March. At the end of February, I will receive my regular paycheck as well as my bonus which should be in the high $3k range. Coupled together with regular payments and depletion of my e-fund, I should be able to completely pay off my credit card.
I know what everyone might think, bad move depleting the e-fund but I will be able to replenish it within weeks with my tax return which should exceed $2k. Come April, my private loans enter repayment. If I do not find another position by that time, I will ask to forbear for a 6-month period.
So, what do you think?
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3 comments:
If you don't reduce your 401k how long would it take? Another month? Why not just use your bonus and tax refund (file early!) to pay it off?
I'm thinking that the interest on the c.c. balances don't exceed the interest you'll earn through your 401k.
Karen
Pay off the credit card debt first !
It would take another month, maybe two.
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