I’m looking for some advice on budgeting, paying off debt, and getting ready to buy a home with my partner in about two years.
I recently started my first steady full-time job, and I take home around $1,500-$1,800 every two weeks. My rent is only 250 a month
Current finances:
Savings
• Chequing: $355.56
• Emergency Fund: $116.01
• Bills Account: $200.62
• Home Savings: $659.73
Debt
• Line of Credit: $28,190 at 5.45%
• Capital One Credit Card: $4,836.62
Credit Score
• 709
I also have student loans, but repayment hasn’t started yet.
My goals are to pay off my credit card, lower my line of credit, and save for a down payment. I’d love to buy a home with my partner within the next two years.
What would be the best strategy? Do I put all my savings on credit and start fresh? Should I focus on paying off the credit card first, or balance debt repayment with saving for a house?
Any advice is appreciated.
What’s the smartest and most efficient way to save and pay off debt
byu/ki0M inpersonalfinance
Posted by ki0M
4 Comments
Start here: https://www.reddit.com/r/personalfinance/wiki/commontopics.
Debt: https://www.reddit.com/r/personalfinance/wiki/debt
Budgeting: https://www.reddit.com/r/personalfinance/wiki/budgeting
Pay off ALL debt (including student loans) first using debt snowball method. Save after.
I started with $107,000 in consumer debt. I am now a homeowner. It works
To get more help with budgeting, post a full budget breakdown of numbers.
What’s the interest on the credit card? Both the card and 28k line of credit need to be paid off asap. You need to put everything you can at those 2. You also need a small emergency fund (1k) to get you through any small emergencies in the mean time so that you don’t use credit again.
You can save for down payment AFTER debt is gone and a larger emergency fund has been established.
And don’t buy a house with someone unless you are married.
Attack the debt with the highest interest rate first (most likely your Capital One card), while making the minimum payments on the other debts. That is how you save the most on interest.
> I’d love to buy a home with my partner within the next two years.
Is your partner going to become your spouse? If not, be careful about going in on a mortgage with someone who is not your spouse. Not sure where you live, but at least in the US, it’s not a good idea.