Financial dilemma question.

[GH41]

Yeah, it depends on where you start from. In our case, it didn't drop as much as expected. we went from pristine to the high side of good. 7-8 years later, we're not that far off from where we were.

We tried negotiating with the cc companies, but as long as we were making payments, they pretty much blew us off. Missed one minimum payment, the APR skyrocketed. They dragged negotiations out while interest accrued at a staggering rate. Basically, the amount that was forgiven was the interest that accrued during negotiations. Would have been better had we simply taken the 401k money and paid them off to start with. Yeah, these shylocks are not your friends.

I would run some numbers before taking money out of the 401K. Don't quote me but if you are younger than 63 (I think) you will pay a 15% penalty plus income tax on what you withdraw. Depending on what bracket you are in it could cost you more than the CC rate.

[MStarmer]

Do not withdraw anything from your 401K. It will never be worth it in the long run. It sounds like you aren't as bad off as you feel. You've got the means to eliminate the CC debt so if that's all you have by all means do it. It's a lot easier paying yourself in lieu of making a lender rich.

I've heard a familiar name in here, Dave Ramsey. I too am a fan and have read several of his books and even took his Financial Peace University class. I would highly recommend his audio book the total money makeover. He's an excellent speaker and makes it easy to listen too. Doing this also put me in contact with a CPA and guy with Raymond James that both follow his principals of investing and goals.

Most people don't make changes until something makes them. Significant life event, career change etc. It happens and you can recover. It's amazing how much we spend and how much we can actually trim off if we need too. I was in the same place at one time with my wife laying in the ICU near death and us with an embarrassing amount of debt. I'm still ashamed that while sitting there I was running numbers in my head trying to figure out what I would do for me and my daughter. Luckily she recovered but it was a serious wake up call to make a change. For some reason I was killing time and downloaded Dave's book and it clicked. I followed it to a T for the most part, eliminating debt from smallest to largest, then putting that payment towards the next smallest (he calls this snowballing). We had two motorcycles, sold them both. Traded in my huge truck for a little Subaru with an almost no interest loan. Sold a lot of guns... Sucked but it's amazing what happens when you're not paying interest making others rich, you start keeping more of your cash. I use a CC only for online purchases and I make it a habit to pay it off EVERY payday. I don't even look at due dates, just click pay in full.

Hang in there, job prospects change and hopefully improve. I wouldn't advise using any credit counselors or any of the fly by night people trying to negotiate pennys on the dollar settlements. Most of them just take your money with little help to you or your credit score. Just pay it off and save save save.

[RetroRevolver77]

I would run some numbers before taking money out of the 401K. Don't quote me but if you are younger than 63 (I think) you will pay a 15% penalty plus income tax on what you withdraw. Depending on what bracket you are in it could cost you more than the CC rate.

Some provisions allow for withdrawal over age 55 for 401K at ordinary income tax if separated from employer. Or an additional 10% penalty if under age 59 1/2 while still still working for the same employer. However, if you have a 403b then it might have a loan provision which you can pay back to yourself- as you pay off the loan. Again, talk to someone who can look over those options as these options change.

[26 Inf]

OP: I realize this is kind of off topic. You've said 'I' quit a bit, never 'we.' If you are single, living alone, with no child support obligations, why are you contemplating staying in a job you hate?

I get it if you are 5 years out from retirement, but if you are looking at slugging it out long term, maybe it would be better for you all around to take a job you would somewhat enjoy, even if it meant less pay and a requisite change in lifestyle.

From what you've said, the job isn't paying you enough to make it worth the suffering.

[Circle_10]

I have a long term (almost eight years) GF who lives with me but she handles her own expenses and her name isn't attached to the house in any way and I pay the mortgage, utilities etc. So while she lives with me it is technically "my" house.

As far as the job goes, I might hate it, but I have a lot of seniority, lots of vacation time, and am generally considered by my supervisors to be highly competent at the job. I'd have to find something pretty similar in pay to even consider leaving. With my interests it's unlikely I'll be getting a good paying career that I actually *like*, so I settle for *tolerate*. I don't really want to move out of the area as I like my house and living close to my family (sentimentality warning: even at 37 I think I still idolize my father to some degree, and it's hard watching him get old before my eyes, so I like to be able to visit regularly and learn what I can from him. He's in perfectly good health but, there's just something about seeing him age that bothers me.)
So I put up with the job because it's a necessary evil that allows me to have a life *outside* of work that isn't so bad (as long as I learn to stop buying tons of crap with my credit card)

[Ironman8]

Have you thought about starting a side business? Even bringing in an extra $1k per month makes a big difference! And in the age of the internet, there are so many options out there to do something that you actually like and make good money doing it. And not to mention all the tax benefits of having your own business.

[Circle_10]

I have entertained the notion but never all that seriously since I'm not sure what I'd do. My GF has repeatedly encouraged me to actually do something professionally with a lot of my writing and artwork, but I'm not terribly productive with it, and not sure I can really turn it into an actual side gig.

[26 Inf]

I have a long term (almost eight years) GF who lives with me but she handles her own expenses and her name isn't attached to the house in any way and I pay the mortgage, utilities etc. So while she lives with me it is technically "my" house.

As far as the job goes, I might hate it, but I have a lot of seniority, lots of vacation time, and am generally considered by my supervisors to be highly competent at the job. I'd have to find something pretty similar in pay to even consider leaving. With my interests it's unlikely I'll be getting a good paying career that I actually *like*, so I settle for *tolerate*. I don't really want to move out of the area as I like my house and living close to my family (sentimentality warning: even at 37 I think I still idolize my father to some degree, and it's hard watching him get old before my eyes, so I like to be able to visit regularly and learn what I can from him. He's in perfectly good health but, there's just something about seeing him age that bothers me.)
So I put up with the job because it's a necessary evil that allows me to have a life *outside* of work that isn't so bad (as long as I learn to stop buying tons of crap with my credit card)

Thanks for taking the time to explain. I get that. One thing we did was go totally credit card for a period of time. This gave us the opportunity to download and then go through our statements categorizing each entry. It helped us to see where we were leaking. Daily stops for cokes for the kids at the local stop and rob after swim practice really added up for us, plus we had developed the habit of eating out as a family of four once or twice a week and my wife and I by ourselves once or twice. You know it costs money, but until you put a pencil to it maybe not how much it REALLY costs.

[AKDoug]

**deleted**Never mind.. looks like you're on the right track

[AKDoug]

Thanks for taking the time to explain. I get that. One thing we did was go totally credit card for a period of time. This gave us the opportunity to download and then go through our statements categorizing each entry. It helped us to see where we were leaking. Daily stops for cokes for the kids at the local stop and rob after swim practice really added up for us, plus we had developed the habit of eating out as a family of four once or twice a week and my wife and I by ourselves once or twice. You know it costs money, but until you put a pencil to it maybe not how much it REALLY costs.

We dropped eating out, designer coffees, and satellite T.V. We combined our cell phones, internet, and streaming into one account. The savings for that alone pay half the mortgage on an investment property we just bought to develop a new business. It was basically stop those things or I was going to have to stop shooting for fun...and that wasn't going to happen.