I just got out of a 12 year marriage, and was awarded about $20k of the debt. But I also got most of the assets. So I need some advice on how to utilize my assets to neutralize the debt so that I can plan for my own retirement ASAP. A little about me: I'm 40 years old with four kids aged 7-16. I am a Registered Nurse in the midwest and earn roughly $55k/year gross. I participate in a 403b plan at 4% to achieve the employer match. Heres a breakdown of my expenses.
Mortgage (tax and insurance incl) $950 remaining balance-$132000
Car loan $250 remaining balance-$6000
Personal loan to finish basement in house $374 remaining balance-$3500
Credit card debt $200 remaining balance-$2500
Student loan debt $125 remaining balance-$9000
Utilities (water, trash, electric, gas) $225
Internet $45
cell phone $160 (I got locked into this before I found MMM, not sure I can change it now)
kids school tuition $125 (committed for the rest of this school year, may be eliminated for next year)
Car insurance $200 (I have a teen driver)
Food/Gas $750
Totals $3630 per month
My paychecks if I don't work over time are roughly $1700 every two weeks. I get $800/mo child support, so approximately $4000/mo of income. So I'm current on everything and I even have some to spare. I am attacking all the debt like my hair is on fire. If I change nothing, the personal loan will be paid off by October, and the Credit card shortly after that (both those pieces of debt have relatively low interest rates at under 6%, still not good I know, but compared to my ex who has credit debt at 25%, I feel better about it).
My assets include the house with a freshly finished basement, which presumably has increased the overall value and gotten the house out from underwater and I don't have to sell or refinance it until the end of 2016 per the divorce agreement. I also have a 403b through my employer which has about 23k and an HSA with a few thousand.
So my question for advanced mustachians is this: Would it be a good idea for me to borrow from my 403b in order to pay off the credit card and personal loan? All interest paid on a 403b loan goes back in to my own 403b and I am still allowed to contribute while the loan is outstanding. If I borrowed $6000 and paid it back over 10 months (the term left on the personal loan) then my paychecks would be $600 smaller, but that's what I'm paying toward those anyway. This seems like a good plan to me, but I wondered if anyone notices a flaw that I don't at the moment. There would be an added benefit of getting my ex off those debts as well, untangling us a little bit more.
Edit to add more info:
I have been working overtime whenever I can, but I am reluctant to overdo this in the event that ex decides to have the child support (CS) re-evaluated and they determine I make too much money or something. I have considered reducing what I contribute to the HSA ($130/pp currently) to increase my income until the debt is gone, but I get nervous about needing that money for actual healthcare costs. The out of pocket max is $8000, and I'm considerably short if catastrophe happened. I have been considering selling plasma as a source of extra income also.
The interest rate on the credit card is 6.25%, the loan rate is 5.99%. I have two student loans, one at 4.75% and one at 5.75%. My car loan is 2.25% and that is on a 2006 toyota sienna. Since I don't really have any spare cash to buy another car outright at the moment, my plan there was to pay the van off and keep driving it until I do have cash, and then get a smaller more fuel efficient car. And I have been hounding the teenager for months to get a job, but his motivation is low. And his grades suck, so I feel like if he's going to spend time at something it should be homework, but yes, he needs a job. As far as the CS going down in a few years goes, I agree, I need to plan for that now. I really hope to be debt free by the time that happens, I would have way more extra income to offset that decrease. But I also hope to be downsizing things as we move along, so that my expenses are lower too.
I had not considered the property tax going up. Thanks for reminding me.
PS, I also ride the bus to work several times a month to avoid driving more. I get a free bus pass from my employer. I feel very badass when I do. :)