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Question for the Money Doctors

Question submitted on May 2, 2011.

Question

My husband and I are approximately $40,000 in debt. My husband and I both have good paying jobs, we have more month than money. I estimate that my husband has $500,000 saved towards retirement through his company through their stock program. Should we stop paying towards retirement to pay off the credit card debt?

Answer

Yes, I would pay off the credit cards.  Then I would cut up your credit cards (actually store them somewhere at home and us them ONLY for emergencies or when you really need a credit card like renting a car or hotel room).  Then I would analyze your expenses, set up a budget and pull together a plan for retirement.  You didn't say what ages you were so that has an impact on the above plan.  You also state that "My husband and I both have good paying jobs, we have more month than money.", and so I suspect you already know that you likely make good enough money to reach your goals, you just need to watch the spending side.  So, analyze your expenses and put together a budget.


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