I'm 38, MFJ, with 2 young kids (in daycare) in a large city in the Midwest. I can't say that I've always been as frugal as I could be. Lifestyle definitely got inflated a bit. And I definitely engaged in some pandemic impulse buying. But, I've steeled myself and I'm back to my resolve. My spouse is on board, so there's no issue there. I have a very specific question regarding payback of debts, and whether my plan makes sense. I don't really follow Dave Ramsey but I am going to use the "snowball" method to take care of my consumer debt and make me breathe a little easier each month.
Gross Income: $13000/mo
Assets:
$600k in 401k/Roth
$290k primary residence
$51k emergency fund (cash)
Liabilities:
$165k mortgage ($1300/mo, 3.375%)
$21k car loan ($468/mo, 1.9%)
$19k solar loan ($180/mo, 2.5%)
$9.6k student loan ($120/mo, 5.8%)
$4.5k student loan ($176/mo, 1.25%)
$2.9k HVAC loan ($195/mo, 0%)
$1.2k medical debt ($77/mo, 0% payment plan from hospital)
So, yeah, some consumer-sucka debt, but at least no credit card debt. But sure, some face punches are probably warranted. I could be doing better, and I've resolved myself to do better.
What I'm wondering, specifically, is:
-Should I reduce my 401k contributions to the lowest to get the match (6%) and throw the rest at my debt? This would free up an extra ~$600/month
-The first one that I plan to attack is the HVAC loan, because it's small and will give me a mental boost, and it frees up a large monthly payment. Then I was planning on going after the 5.8% student loan. Is that reasonable?
-I got the solar installed this year. We plan on living in our house forever, and the federal + local credits offset a large chunk of the cost. It will cover ~95% of our energy usage, when averaged out over the year. So, I'm expecting about a $5k tax credit when I file my taxes in 2021. Originally I was going to throw this right into the solar loan, but I wonder if it would be smarter to use it to wipe out one of the smaller loans. Thoughts?
Thanks for any advice.