HAVE A QUESTION? GET ANSWERS.

EMAIL US: ASKPETE@PETETHEPLANNER.COM

Today we are digging all the way into the mailbag! Pete and Damian respond to listener questions about credit card debt, 529 accounts, and talk financial stability!

Don’t forget! HEY MONEY is your new secret weapon for advice in your personal finances.

No time to listen? BUMMER. Here’s some of what happened:

Show Notes:

Mailbag Question 1:

• “I recently took a job after being downsized in January, making about $20K less. I accumulated about $38K in credit card debt. Some of the interest monthly is about as high as the payment itself. Should I take a loan against my 401(k) to pay off the high-balance ones and keep paying the lower balance ones? Or should I do so to pay off all the loans?“
• Damian: Let’s think about not taking the easier way out. Can we make the numbers work within the income you have? If it’s doable, it’s a much better option than taking a 401(k) loan out.
• Pete: The 401(k) loan should be our last possible option; even if that includes some major lifestyle and systemic changes. If what led to the $38K debt hasn’t stopped, taking a loan from your future is the worst possible thing to do.

Mailbag Question 2:

• “My son is 7 now. I’m exploring 529 accounts. What is an optimal amount to save every month if he goes to a private college? Is it okay to split my savings across multiple 529 accounts? Any other savings vehicles you can suggest?“
• Damian: That money will grow tax-free, when it comes out for a qualified purpose, It comes out tax-free. That’s a beautiful thing. Seek the double or triple tax-advantaged tools.
• Pete: There are at least two tax advantages to 529 accounts. For example, here in Indiana, there is a state tax credit. In Florida, there is not, however. There could be several options, but talk to an expert first, as age, vehicle type, and other factors could be at play.
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