Young dad, $15,000 in credit card debt

By Carolyn Bigda @Money July 19, 2012: 1:02 PM ET

(Money magazine) -- Like many thirtysomethings, Carlos Rodriguez is repairing financial damage from his twenties.

The health care project administrator has $15,000 on credit cards, partly from financing a master's degree, but also from "reckless spending," he admits.

When real estate was hot, he bought a seller-financed house in Austin to use as a rental property, inheriting a property lien that's now $3,600.

And he has grownup obligations: He has an 8-year-old son from a previous relationship and pays $720 a month in child support.

The good news is that Rodriguez recently received a promotion that pushed his salary from $59,000 to $67,000. In addition, he earns $6,500 annually working as a division petty officer in the Navy Reserve. Eventually he'd like to become a chief strategy officer in his field.

Related: When will you get out of debt?

He also wants to save more for retirement and his son's college. But he knows the credit card debt is holding him back.

THE PROBLEM

One word: debt. Besides the credit cards and property lien, Rodriguez has an $8,100 auto loan, a $73,000 mortgage on his rental property at a 7% interest rate, and a $139,000 mortgage at 6% on a multifamily home (he lives in half of it and rents the other side).

Plus, he has only $1,000 saved for emergencies.

RODRIGUEZ'S FINANCES

Income: $73,500

Assets: $36,000 in retirement accounts, $1,000 in cash

Goals: Pay off debt; move up in his career

THE ADVICE

Refinance. Rodriguez enjoys being a landlord. His rental income covers three-quarters of the monthly payments on his home loans -- including the one he lives in.

After speaking with local mortgage brokers, Austin financial planner Eric Hehman says Rodriguez could drop the rates on his loans to 4.5% and 4%. By then applying the $370-a-month savings to the high-rate debt, he could wipe it out in just over two years.

Save more. Post-raise, Rodriguez should hike his 403(b) contribution from 3% to 10% of pay. He can also put $150 a month into his emergency fund and $150 into a 529 college savings plan for his son; once his debt is retired in two years, he can boost that emergency savings even more.

Focus on career goals. Rodriguez should reach out to higher-ups in his current organization and broaden his contacts outside his immediate network to include, say, advisory firms that help support chief strategy officers, says Kate Wendleton, president of the Five O'Clock Club, a national career-coaching group.

Related: Turn saving into a habit

Says Wendleton: "He might even get hired by one of them."

LESS DEBT, MORE SAVINGS

A refi -- and a raise -- will give Rodriguez the means to wipe out his high-rate debt in 25 months.

Currently, he pays $776 a month in high-interest debt and puts no money away for his son's college.

Monthly contributions post-raise and refinance: