Ask The Get Out of Debt Experts Getting Out of Debt Paycheck-to-Paycheck

We Can Just Make Our Minimum Payments and Have Good Credit But Need Help. – Becky

“Dear Steve,

My husband and I are in our late 30’s with 2 sons. We have $22k in debt, $10k personal loan and $12k credit cards. We make the minimum payments each month as that is all we can do and our credit scores are above 750.

I look at all of the snowball theories and paying highest interest first theories but, we don’t have huge amounts that we can add to the minimum payments. I just want to pay this debt off and I’m trying to find the best way. It seems almost impossible to ever get it paid down.

We were given an approval from Prosper for 18% but all of our debt ranges from 6% to 12% so does going to one loan for 18% makes since?

Do I try and transfer balances to cards with 0% for periods of time to try and knock it out that way? I’ve even thought about making a withdrawal from retirement IRA and just being done with it. This is so confusing, please let me know your recommendations. I’m open to any ideas.


couple working

Dear Becky,

What are the combined monthly payments for your current personal loan and credit cards? What is the projected monthly payment for the Prosper loan? Let’s look at the math.

One thing is clear, unless we alter the equation here by increasing income, reducing expense or intervening with the debt, not much is going to change.

If you have not already done so you might want to start tracking your expenses for the next month or so and create a spending plan. See my free book Eliminate Your Debt Like a Pro for instructions on how to do this.

What I’m very concerned about is if you are saving for retirement now or have put that on hold because you are limping along. If you can not afford to save now then we might need to take some action more than budgeting.

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My fear is that if you are just paying your way out of the debt and not savings, you may be throwing away millions in retirement.

Please post your responses and follow-up messages to me on this in the comments section below.

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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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