What is the best approach to deal with my debt?

[Christopher Hall]

Like a lot of young people have done my wife and I have managed to place a lot of debt on top of ourselves, some of it good some of it bad. My wife is a teacher making 35000 a year. She is a 10 month employee so her paychecks come to 2800ish a month. I am active duty enlisted Air Force, e4 making 3200ish a month. Both of those are after taxes and include both off us putting about 200 a month into a retirement. I just graduated college and am focused on reducing debt and improving our financial situation.

The good:

We own two houses. One that we rent out and make about 550 a month cash flow past fixed expenses. The second we live in now and are going to move out after we have fulfilled the year va requirement for residency. I expect to make about 350 a month past fixed expenses on this one. We hit the year mark in February so I have already marketed the property and am generating interest to support this assumption. Both homes are on a va loan with interest rates less than 4.2%.

We have 6500 cash saved.

We both have 700 plus credit scores and have no negative history.

The bad:

My wife has 45000 in student loans. We have it set on income driven repayment on the 10 year plan where it is forgiven for public service since she is a teacher. Right now the payments are 0 and they qualify as payments. We are about a year into the 10 year plan.

I have 15000 in student loans from before I joined the military. They are not in repayment yet, I just graduated this month but they will be in a few months. I should be able to do the same 10 year plan. At some point though we will be required to make larger payments once her income is used because they use past taxes and she wasn’t working on those yet.

We have two car loans. One is 16000 and the payment is 307. The interest is 4%. Yes it’s a 6 year loan, yes I know that is to long. The car is probably worth 13-14000.

The other is 30,000, yes we were young and bought a brand new car and fully understand this was a bad decision. It’s payment is 470 yes it’s on 6 years too... and the car is probably only worth 21,000. Yes I know that’s bad.

We have about 6000 in credit card debt.

We have a 10,000 dollar personal loan that’s has a payment of 305 and will be paid off in June of 2020.

We make enough to make all payments and is we just continued as normal everything would pay itself off. I feel bad about

[Gregory H.]

You really need to check out Dave Ramsey, because you have every type of debt you possibly can and are living WAY above your means, even if you think you aren't. You should really tackle this debt before you get deeper into real estate, because if we hit a recession, which we probably will in a year or two, and a few things go wrong like you lose a tenant or two due to job loss, and your property values tank 20-30% ... you'll basically be on the verge of bankruptcy. How many months of vacancy to you withstand right now?