Ask Paula: No, Really, I'm Asking for a Friend! -- How to Crush $500,000 in Debt

Afford Anything | Make Smart Money Choices

Paula Pant | Cumulus Podcast Network

Entrepreneurship, Investing, Business

4.7 • 3.6K Ratings

🗓️ 3 July 2017

⏱️ 53 minutes

🔗️ Recording | iTunes | RSS

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Summary

#84: This week, I tackle your questions with my good friend, recovering financial planner Joe Saul-Sehy. Here's what we answer: 1. I'm asking for a friend -- no, really, I'm asking for a friend! My friends are married and buried. They're a married couple, buried in $500,000 of debt. Some is federal student loans, some is private student loans, and some is credit card debt. They're paying the minimum on their student loans, with the hope that these loans will be forgiven after 25 years. They're also saving money in their retirement accounts. Is this a terrible plan? Should they stop saving for retirement while they wipe out their student loans? If so, how can I convince them? 2. My husband and I are both 30 and live in Ft. Collins, Colorado. We don't plan on having children. We know that long-term care insurance gets more expensive as you age. Should we buy this insurance now? Or can we self-insure for this through adequate retirement/investment funds? 3. I own my home free-and-clear, and I'm buying a second home. Should I take a cash-out refinance on my primary home? Get a conventional loan from the bank? Or something else? 4. My wife, 4 children and I live in the San Francisco Bay Area. We have $5,000 in credit card debt, which we've paid down from $30,000 in the last two years. We owe $20,000 on a minivan and $18,000 on student loans, both of which have 2-3 percent interest rates. We have two IRA's, one Traditional and one Roth. I also have about $20,000 in my company's non-matching 401(k). Should I focus my future investments on Traditional or Roth accounts? What accounts should I use when saving for my children's college funds? 5. I'm curious about your own investments, Paula. What's under the hood? __ Thank you to everyone who left a comment after last week's show. I'll talk more about these amazing responses at the end of Episode 85 (next week's episode.) For now -- enjoy today's show! Thanks! Show notes can be found at http://affordanything.com/episode84 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	You can afford anything but not everything.
0:10.9	Every decision that you make is a trade-off against something else.
0:13.8	If you pay one bill, you're not paying another.
0:15.7	If you buy one thing, you're not buying something else.
0:18.1	And that's true, by the way, not just of your money, but also your time, focus, energy,
0:21.6	attention, and which podcast do you listen to?
0:24.3	So thank you for choosing this one.
0:26.0	My name's Paula Pant, host of the Afford Anything Podcast.
0:29.2	Every other week, I answer questions that you, the listeners, have sent in.
0:33.2	And this week, I am back on the air with my buddy Joe Salcihi from the Stacking Benjamin's
0:37.4	podcast to answer your questions.
0:40.2	So let's kick off with this question.
0:42.8	Hi, Paula.
0:44.2	Question for you.
0:45.2	I'm asking for a friend.
0:47.1	No really, I'm asking for a friend.
0:48.8	I have a friend who's married and combined, they have $500,000 worth of debt.
0:54.3	Some of it is federal student loans.
0:56.7	Some of it is private student loans.
0:58.6	Some of it is credit card debt.
1:00.4	They're convinced that they should still be contributing some money towards retirement
1:05.0	while paying the minimums with hopes of the federal loans, which is most of their loans
	...

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