On The Money: Money Action Plan for Tuesday, Aug. 19 - On the Money - Money Action Plan

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Money Action Plan for Tuesday, Aug. 19

Published: Tuesday, 19 Aug 2008 | 8:30 PM ET

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By: Carlo Dellaverson
Web Producer

Suzanne and Brett feel like they're underwater. Between credit card debt and a loss on an investment, the couple wonders if they’ll ever be able to start a family.

Beside $14000 in credit card debt, Brett is losing $1000 every month on a piece of property in Florida he bought as an investment, but like so many others, is seeing its value plummet daily. Carmen recommended a short sale on the home. Taking the hit now is better than continuing to watch the investment hemorrhage, she said. The short sale will hurt his credit score severely, but it is likely to be worth it in the long run to just be rid of it (and Suzanne's credit won't suffer).

The couple’s credit cards needs to be paid off as soon as possible. Luckily, Suzanne and Brett have a savings account that equals their debt. This one is simple – take the savings and pay off the cards immediately. Credit card debt is always the first type of debt that you should pay off, Carmen said.

Once they’re back to zero, having a baby will make financial sense. With the losing property and credit card debt distant memories, Suzanne and Brett will be able to spend frugally and save for the future of their family.

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