how to: get out of debt

If you’re ready to get out of debt and boost your fiscal fitness, you’ve come to the right place. Staring at that huge stack of bills, fielding the unpleasant phone calls -- even just knowing you’re in the red can really drag you down. Luckily, we’re here to help you get back up! We have tons of advice for getting out of debt, including credit card debt help and an easy-to-use debt calculator to help you pay off debt. You’ll also find debt advice on how to renegotiate your credit card debt and ways to improve your credit (even before you’re out of debt!). Not sure where to begin? Why not give our 7 simple steps to getting out of debt at try -- they will definitely help you find your financial footing. Tackling your debt as a twosome? We’ve got plenty of debt advice geared toward couples. Learn about financial basics for newlyweds, including how to choose the right bank and when to merge your accounts. Peek into real couples’ budgets and see how they fixed their finances. And if you’re wondering where to find all that extra money to pay off debt -- don’t worry, we’ve got that covered too. We have debt help and cash-saving secrets from financial pros, and the money tips that spending savvy couples must know -- plus saving secrets from fellow Nesties. Finally, check out our tips to help you stay out of debt for good -- set up a household budget, plan your paychecks, and get credit smart.

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Money Q&A: Can I Borrow From My 401(k)?


Can I borrow from my 401(k) to pay off debt?


Yes, some plans let you borrow money from your account and simply charge an interest rate, and it works like any other loan you'd get from a bank or mortgage company. But be careful, because when you're under age 59-and-a-half and you take money out of your 401(k), you have to first pay income taxes on the money. (Remember, you stashed it into that retirement account without giving the government a dime.) Then, after paying those taxes, you'll pay an additional 10-percent tax penalty. There are some exceptions and the penalty may be waived if you incur serious medical expenses, experience a severe disability, or have a financial hardship that makes it impossible as a first-time homeowner to make your down payment. But the bottom line is, try not to borrow from it.
Nestpert Brett Graff, The Home Economist and former government economist

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