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Personal Finances / Credit Cards and Consumer Debt


Subject:  Re: It's time. Date:  2/7/2019  12:17 PM
Author:  aj485 Number:  312470 of 312987

To that end, what are your thoughts on downsizing my retirement contributions for the short but not super-short term. Currently we divert $200 per 2 week pay period, pre-tax. My employer contributes 3% to a separate plan and that would continue. There is no employer match to lose. If I cut the contribution down to $50/pay for example, that frees up $300 per month to add to debt reduction.

As Agg already indicated, it's critical that you actually put that $300 per month toward debt, IN ADDITION to what you are already CONSISTENTLY paying.

Since, at this point, you haven't built a record of several months of consistently paying a specific minimum amount on your debt just from your regular income (i.e. not counting for all of the stuff you are selling, cashing savings bonds, doing way more on your side hustle than you can continue doing, any other found money, etc.), I would say that it's too early in the process to take the step of cutting your retirement contributions. Once you get to a point where you can say - without any additional changes to our lifestyle, we can and do pay $X toward the debt every month, month in and month out, for at least 4 - 6 months - then you should consider things like cutting retirement contributions.

Please remember - you are in a marathon, not a sprint. It took you years, if not decades, to build up this debt. It's going to be a many months (probably years) long process to pay it down. So if you take a few months to get to where you are optimizing everything, it's okay.

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