Ask Terry Questions Savings vs debt repayment vs retirement

Savings vs debt repayment vs retirement

By Terry Savage on April 25, 2023 | Financial Planning / Retirement

I’m a 54 year old single woman. My gross salary is $85K/year. I have a Vangaurd IRA that was a 401K rollover from a job years ago with a current balance of $75K invested in Vanguard’s Target Retirement 2035 fund. I just paid off my car and have $18K in credit card debt, with $2K in a savings account. I just became eligible for 401K at current job and I’m contributing 10%.

I would like to build up my savings more while paying down debt before I up 401K contribution to 15%. I would like to buy some Treasury bills eventually.

What would your suggestions be for my situation ? Thank you!

Terry Says

Get a part-time or weekend job now, while there is demand (not necessarily in your career path, maybe as a waitress or salesperson) and PAY DOWN THAT CREDIT CARD DEBT ASAP!
TRICK: Write down the current minimum monthly payment and double it. Post that number on your wall. Pay that same amount every month and do not charge another penny. The balance will be paid off in less than 3 years — and you’ll save a fortune in interest!

That’s the best thing you can do for your future right now.

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