Need financial advice

[Stojakapimp]

So I'm trying to make a concerted effort to pay off my credit card debt, but I have a question.

My parents opened up a gift trust account for me a long time ago, and while it's not a ton of money, it just matured this last year and I can now take it out. Well, unfortunately this last year has been brutal on the economy and the gift trust has lost almost $1k. Should I still take out what's in there now to pay off some of my debt, or would it be wiser to let is sit in the hopes that the market will turn around and it will make some of that money back. I mean, we gotta hit the bottom sometime soon, right? Right?

thanks!

 

[IronWing]

Originally posted by: Stojakapimp
So I'm trying to make a concerted effort to pay off my credit card debt, but I have a question.

My parents opened up a gift trust account for me a long time ago, and while it's not a ton of money, it just matured this last year and I can now take it out. Well, unfortunately this last year has been brutal on the economy and the gift trust has lost almost $1k. Should I still take out what's in there now to pay off some of my debt, or would it be wiser to let is sit in the hopes that the market will turn around and it will make some of that money back. I mean, we gotta hit the bottom sometime soon, right? Right?

thanks!

What is the interest rate on your debt? What is your estimate of the return you might expect on the trust over the time period it will take you to pay off your debt? And finally, do you have a cash reserve to use as an emergency fund so you won't have to put any unexpected expenses on the CC?

 

[HardcoreRobot]

are there any tax implications to taking money out of the trust?
if you have a very high rate on your debt, and its free to take out of the trust, i would do it

 

[Stojakapimp]

Originally posted by: ironwing

Originally posted by: Stojakapimp
So I'm trying to make a concerted effort to pay off my credit card debt, but I have a question.

My parents opened up a gift trust account for me a long time ago, and while it's not a ton of money, it just matured this last year and I can now take it out. Well, unfortunately this last year has been brutal on the economy and the gift trust has lost almost $1k. Should I still take out what's in there now to pay off some of my debt, or would it be wiser to let is sit in the hopes that the market will turn around and it will make some of that money back. I mean, we gotta hit the bottom sometime soon, right? Right?

thanks!

What is the interest rate on your debt? What is your estimate of the return you might expect on the trust over the time period it will take you to pay off your debt? And finally, do you have a cash reserve to use as an emergency fund so you won't have to put any unexpected expenses on the CC?

The interest rate on the card is a little under 6%, and if I didn't use the gift trust money to pay some of it off, then I'd estimate that it would take me about a year to pay off the credit card. That'd be roughly $240 of interest. It's hard to estimate what the stock market is gonna do, but over this past year the gift trust has lost 20%. I don't imagine it will make up all that ground in the next year, but let's say that if it draws 10% then that would be a gain of about $300. I guess it's really not all that much more than the interest I'd accrue on the credit card.

I don't really have a big cash reserve as an emergency fund, but I'm not completely broke either.

You think that because if the gift trust did make back 10% over the next year that it'd barely cover the cost of the credit card interest that I may as well take that money out?

Thanks again.

 

[JS80]

Originally posted by: Stojakapimp

Originally posted by: ironwing

Originally posted by: Stojakapimp
So I'm trying to make a concerted effort to pay off my credit card debt, but I have a question.

My parents opened up a gift trust account for me a long time ago, and while it's not a ton of money, it just matured this last year and I can now take it out. Well, unfortunately this last year has been brutal on the economy and the gift trust has lost almost $1k. Should I still take out what's in there now to pay off some of my debt, or would it be wiser to let is sit in the hopes that the market will turn around and it will make some of that money back. I mean, we gotta hit the bottom sometime soon, right? Right?

thanks!

What is the interest rate on your debt? What is your estimate of the return you might expect on the trust over the time period it will take you to pay off your debt? And finally, do you have a cash reserve to use as an emergency fund so you won't have to put any unexpected expenses on the CC?

The interest rate on the card is a little under 6%, and if I didn't use the gift trust money to pay some of it off, then I'd estimate that it would take me about a year to pay off the credit card. That'd be roughly $240 of interest. It's hard to estimate what the stock market is gonna do, but over this past year the gift trust has lost 20%. I don't imagine it will make up all that ground in the next year, but let's say that if it draws 10% then that would be a gain of about $300. I guess it's really not all that much more than the interest I'd accrue on the credit card.

I don't really have a big cash reserve as an emergency fund, but I'm not completely broke either.

You think that because if the gift trust did make back 10% over the next year that it'd barely cover the cost of the credit card interest that I may as well take that money out?

Thanks again.

your parents set up a trust fund for $5k?

 

[Stojakapimp]

Originally posted by: JS80

Originally posted by: Stojakapimp

Originally posted by: ironwing

Originally posted by: Stojakapimp
So I'm trying to make a concerted effort to pay off my credit card debt, but I have a question.

My parents opened up a gift trust account for me a long time ago, and while it's not a ton of money, it just matured this last year and I can now take it out. Well, unfortunately this last year has been brutal on the economy and the gift trust has lost almost $1k. Should I still take out what's in there now to pay off some of my debt, or would it be wiser to let is sit in the hopes that the market will turn around and it will make some of that money back. I mean, we gotta hit the bottom sometime soon, right? Right?

thanks!

What is the interest rate on your debt? What is your estimate of the return you might expect on the trust over the time period it will take you to pay off your debt? And finally, do you have a cash reserve to use as an emergency fund so you won't have to put any unexpected expenses on the CC?

The interest rate on the card is a little under 6%, and if I didn't use the gift trust money to pay some of it off, then I'd estimate that it would take me about a year to pay off the credit card. That'd be roughly $240 of interest. It's hard to estimate what the stock market is gonna do, but over this past year the gift trust has lost 20%. I don't imagine it will make up all that ground in the next year, but let's say that if it draws 10% then that would be a gain of about $300. I guess it's really not all that much more than the interest I'd accrue on the credit card.

I don't really have a big cash reserve as an emergency fund, but I'm not completely broke either.

You think that because if the gift trust did make back 10% over the next year that it'd barely cover the cost of the credit card interest that I may as well take that money out?

Thanks again.

your parents set up a trust fund for $5k?

Not sure because I can't access records from that far back online. Sure I could find out and ask, but doesn't really matter to me. I'll take whatever money I can get.

 

[JS80]

Originally posted by: Stojakapimp

Originally posted by: JS80

Originally posted by: Stojakapimp

Originally posted by: ironwing

Originally posted by: Stojakapimp
So I'm trying to make a concerted effort to pay off my credit card debt, but I have a question.

My parents opened up a gift trust account for me a long time ago, and while it's not a ton of money, it just matured this last year and I can now take it out. Well, unfortunately this last year has been brutal on the economy and the gift trust has lost almost $1k. Should I still take out what's in there now to pay off some of my debt, or would it be wiser to let is sit in the hopes that the market will turn around and it will make some of that money back. I mean, we gotta hit the bottom sometime soon, right? Right?

thanks!

What is the interest rate on your debt? What is your estimate of the return you might expect on the trust over the time period it will take you to pay off your debt? And finally, do you have a cash reserve to use as an emergency fund so you won't have to put any unexpected expenses on the CC?

The interest rate on the card is a little under 6%, and if I didn't use the gift trust money to pay some of it off, then I'd estimate that it would take me about a year to pay off the credit card. That'd be roughly $240 of interest. It's hard to estimate what the stock market is gonna do, but over this past year the gift trust has lost 20%. I don't imagine it will make up all that ground in the next year, but let's say that if it draws 10% then that would be a gain of about $300. I guess it's really not all that much more than the interest I'd accrue on the credit card.

I don't really have a big cash reserve as an emergency fund, but I'm not completely broke either.

You think that because if the gift trust did make back 10% over the next year that it'd barely cover the cost of the credit card interest that I may as well take that money out?

Thanks again.

your parents set up a trust fund for $5k?

Not sure because I can't access records from that far back online. Sure I could find out and ask, but doesn't really matter to me. I'll take whatever money I can get.

How do you know how much the balance is then? I came up with $5k bc you said it lost 1k at -20%. Doesn't really make sense to spend all that money to set one up for $5k.

What card do you have that has a 6% interest rate? i need to get me one of those!

I would not recommend selling in the middle of a bear market unless you REALLY need the money and/or your debt interest is out of control.

 

[tk149]

Whatever you do, make sure that once you pay off the debt, that you don't fall back into the hole. If you ran up that debt by being irresponsible, then don't be afraid to use scissors to help you manage your cards.

I personally think that the economy in general will take more than a year to recover (probably longer).

Since the trust decreased in value when the market dropped, at least part of it probably is made up of stocks. Since its a trust, it's probably handled pretty conservatively, so don't expect it to recover dramatically.

If some of it is in CD's or Treasuries or something else with a decent guaranteed rate of return, hang onto that part. If you have a CD at 6% right now, I'd hang onto that for dear life!

I'd say that if:

(interest on the credit card debt) >= (expected rate of return over the next year on trust) - (taxes on gain)

then sell the trust.

You should talk to the financial professional who is handling the trust for you to help decide.

 

[Stojakapimp]

Originally posted by: JS80

Originally posted by: Stojakapimp

Originally posted by: JS80

Originally posted by: Stojakapimp

Originally posted by: ironwing

Originally posted by: Stojakapimp
So I'm trying to make a concerted effort to pay off my credit card debt, but I have a question.

My parents opened up a gift trust account for me a long time ago, and while it's not a ton of money, it just matured this last year and I can now take it out. Well, unfortunately this last year has been brutal on the economy and the gift trust has lost almost $1k. Should I still take out what's in there now to pay off some of my debt, or would it be wiser to let is sit in the hopes that the market will turn around and it will make some of that money back. I mean, we gotta hit the bottom sometime soon, right? Right?

thanks!

What is the interest rate on your debt? What is your estimate of the return you might expect on the trust over the time period it will take you to pay off your debt? And finally, do you have a cash reserve to use as an emergency fund so you won't have to put any unexpected expenses on the CC?

The interest rate on the card is a little under 6%, and if I didn't use the gift trust money to pay some of it off, then I'd estimate that it would take me about a year to pay off the credit card. That'd be roughly $240 of interest. It's hard to estimate what the stock market is gonna do, but over this past year the gift trust has lost 20%. I don't imagine it will make up all that ground in the next year, but let's say that if it draws 10% then that would be a gain of about $300. I guess it's really not all that much more than the interest I'd accrue on the credit card.

I don't really have a big cash reserve as an emergency fund, but I'm not completely broke either.

You think that because if the gift trust did make back 10% over the next year that it'd barely cover the cost of the credit card interest that I may as well take that money out?

Thanks again.

your parents set up a trust fund for $5k?

Not sure because I can't access records from that far back online. Sure I could find out and ask, but doesn't really matter to me. I'll take whatever money I can get.

How do you know how much the balance is then? I came up with $5k bc you said it lost 1k at -20%. Doesn't really make sense to spend all that money to set one up for $5k.

What card do you have that has a 6% interest rate? i need to get me one of those!

I would not recommend selling in the middle of a bear market unless you REALLY need the money and/or your debt interest is out of control.

Yeah, not real sure about the entire history of the trust. I think my parents just put a small amount of money in when I was little and hoped that it would mature really nicely when I turned 25. Don't think they had a lot of money back then, but at least they were giving me something.

And 6% interest rate is with a Wells Fargo credit card. I've been with them for a while now, but I got it down that low because I called them a couple times throughout the year and asked if they could lower it. It's amazing what one little phone call can do.