Originally Posted by
Flogger
To the OP: You do realize the bonus is taxed? So, you can pay off maybe 16K in credit card debt?
You'll incur moving expenses, etc.
Find a cheaper place in CO for now. There's always a cheaper place.
Upgrade quick. Live on your FO pay and put all the CA pay toward the debt.
Try to shop the credit card or talk to your bank and family about refinancing the debt.
And cut up your credit card until it's paid off. Don't cancel the credit card because that will hurt your credit rating. Use a debit card until the credit card is paid off. That will guarantee you don't build a balance.
Once the credit debt is paid, call your credit card company and report you cut the card up a while back and you need a new card.. Then get rid of the debit card, because they are not as safe as a credit card, theft-wise.
Then call Dave Ramsey and brag.
Dave Ramsey would frown at the advice you gave: refinance debt and not cancel your credit cards.
Originally Posted by
DrunkenShytbird
Another way to forestall the Taxman is to max your 401k out & if you are real Bada$$, to max out an additional IRA on top of the 401k- a lot of Folks are unaware that you can do this. You can also get your MAGI down enough to qualify for the EITC (Earned Income Tax Credit) and the Saver's Credit or Form 8880 (which gives you free money to encourage retirement savings in one's 401k, or IRA.
A lot of good information. I would also add another item of interest for many pilots, that you can take advantage with a lower MAGI, is the student loan interest deduction. All these items mentioned, including being able to contribute to an IRA, have a MAGI phaseout and limit.