- My Dollar Plan - https://www.mydollarplan.com -

Help a Reader Payoff Debt

Last night I got a call from a friend looking for some financial help. He has $14,300 in debt and has a goal to be debt free by November. Before I put together a plan for him, I’d like to hear what you have to say about it!

Debt Details

Here are the details of his debt:

  • Personal Line: $3,500 balance @ 15% – $7,000 limit
  • Credit Card #1: $2,300 balance @ 9.6% – $5,000 limit
  • Credit Card #2: $6,600 balance @ 8.5% – $8,000 limit
  • Credit Card #3: $1,900 balance @ 18% – $2,000 limit

Card #3 earns cash rewards [1] so he’d like to use it for gas and groceries once all the debt is paid off.

His Lifestyle and Money

You’d probably like to know a little bit about him to put the situation in context. He’s single, in his 30s, about two years out of college and works for a mega corp in the Pacific Northwest. I’m not certain on his exact salary, but it should be in the very high five figures.

He is currently paying the following:

  • PL: $210 per month
  • CC #1: $0 per month
  • CC #2: $1,200 per month
  • CC #3: $100 per month

In addition, he has the following sources of income that he could use:

  • $3,800: company stock that was awarded to him.
  • $2,500: company stock that will be available in August.
  • $3,000: a possible bonus in September. However, if possible, he’d like to use this for something else.

What Should He Do?

What he’d like to know:

  1. Should he sell his company stock and use it to pay off debt?
  2. How much should he pay on each card each month?
  3. In which order should he pay off the cards?

Share your thoughts. If you were him, how would you pay off the debt? I’m going to put together a plan for him early next week. I’m open to including any of your suggestions!

Update: Check out some of the reader ideas in 7 Ways to Payoff Credit Card Debt [2] and what I would do 10 Step Plan for Debt Elimination [3].