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Paying off credit card debt, then what?

By Terry Savage on May 15, 2019 | Credit/Debt

Hi Terry!

I love seeing you help people on WGN news! I thought I’d reach out about my situation. Over the last few years I managed to get myself into about 16g in credit card debt (slippery slope?!?) but since starting a new job last June I’m almost through paying all that off. The only other debt I have is a 5g in student loans (4.8% interest rate). I figured it would be best to just keep on the plan I am now that’s knocking out my credit card debt to get rid of my students loans(probably by the end of the year). My question is this. Once I’ve paid off both my credit card AND student loan debt, what’s the best thing to do with my money? I have an employee funded 401k that I’m matching 6% at the moment as well as my own Roth IRA that I’ve been slowly feeding on my own on a monthly basis. Should I save money to max out my IRA account, pay more into my 401k or just start my own savings?

Any help would be greatly appreciate!

Beth

Terry Says

Wow, first — congratulations.  You’ve really managed to dig out of debt.  And I want to post this as an inspiration to others.  For sure, pay down your student loan debt before the interest eats you alive!  And yes, max out your Roth IRA.  And YES, you should have six months living expenses saved in a money market deposit account, just to feel secure.   When you get to that point, PLEASE write me again and let me know!  It will be a great story and I’d love to do a column (without revealing your name) so people will know it can be done!

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