<prompt> Human: Long time lurker, first time poster...Im actually nervous to post this based on responses Ive seen. But here we go!I appreciate anyone who reads this, Ill try to be succinct as possible while providing all necessary details.My wife and I have never been truly out of debt. Be it paying for an unnecessarily large wedding, having kids immediately, buying a townhouse soon thereafter. You name it. We make good salaries and arent extravagant spenders but are still paying for mistakes of the past.Were pregnant with our 3rd child, due soon, and are looking to purchase our final single family home selling current townhouse. Here are some of our financial stats to be followed by a specific question... Only source of income is jobs - 200k a year. Her 401k is essentially gone after we pulled it to pay for this house as a loan changed jobs after that and had to deal with early withdrawal. My 401k is okay but currently repaying loans on it. 5 separate loans at 1000 total per month. They all end separately over the next 3 years. 2238 a month, mortgage escrow home warranty 1200 a month, daycare 401k Loans All loans are 3.25 interest rate paid back into my account Loan 1 - 257 a month, 8100 left, Payoff 1017 Loan 2 - 235 a month, 9700 left, Payoff 0918 Loan 3 - 99 a month, 2200 left, Payoff 1216 Loan 4 - 183 a month, 4600 left, Payoff 0317 Loan 5 - 218 a month, 7500 left, Payoff 0118 500 a month, Discover Loan, Payoff 516 500 a month, loan to parents who provided us down payment no interest, Payoff 1222 10 years but planned to increase after 4-5 years to pay down sooner 260 a month, school for eldest daughter 125 a month, gym fees 400 a month, cablephone bill 300 a month, utilities 77 a month, HOA 90 a month, life insurance 180 a month, car payment, 4000 left on loan, 4 interest 40 a month, car insurance Credit Card CC1 - 8000 total, 250 min, 27 interest CC2 - 4500 total, 150 min, 24 interest CC3 - 4500 total, 150 min, 19 interest CC4 - 800 total, 60 min, 4 interest Student Loans Loan 1 - 75 a month, 5 interest, 3500 left Loan 2 - 163 a month, 6 interest, 13000 left Loan 3 - 181 a month, 6 interest, 10000 left 2600 a month budgeted, living expenses. Gas, groceries, everything else. Based on averages since 2009, we average 1700 a month in these categoriesThe long and short of it is we pull in about 10400 after taxes and shell out about 9600 in expenses. In a perfect world wed stay in this house until all CC debt is cleared and weve removed some of the 401k loans to clear up some of our monthly income. But this isnt a perfect world and we all answer to someone right?We went to a mortgage lender to talk options yesterday which was great because it showed us how much our payment would go up and we know that we cannot make that happen in our current state. But it led to questions on how we can reduce our monthly expenses to make that payment affordable.Option 1 - Based on a lot of posts here this may be a dumb question...Should we take the rest of the 401k loans I have as an early withdrawal and pay the penalty? That would immediately free up 1000 a month. That could be turned around and used to clear CC debt.Option 2 - Wait a year and get a few more CCs paid off to free up some monthly income? We are currently for the first time ever at a place where income exceeds debts and are starting to crawl out of our perpetual hole.I appreciate any advice that may come. Perfect is truly the enemy of good in our situation, but were really trying to make it right.Assistant: I have put all your debt into unbury.us so you can visualize it. Note that the Discover amounts may be off since you didnt give all those details.It will take your 4 years to get out of debt at this rate. In some respects, you are lucky that 32k is going back into your own 401k, and 60k is at 0 interest. Very lucky.Personally, your 401k loans are whats giving me a heart attack. You have been living beyond your means for years and cannot afford any room in your budget. If you loose your job you will have to come up with 32k in 60 days. Sweet Jesus. The main thing you and your wife need to do is resolve to STOP taking on debt. This needs to end.When does daycare end and school start for your little ones? That will free up another 1200 to throw at this debt every month. 400 on phones and cable is stupid considering how far underwater you are. You should also probably give up 125 gym fees and take up running. Honestly your other expenses do not seem that high to me. Even your home is only 20 of your income. I am sure you can shave a couple hundred off the other living expenses, and you should, but its hard to say since you dont break it down further.You cant have a more expensive house. This is just not an option for several years. Basically whats happened is that it all caught up with you now. You make great money. Your fixed expenses are in line with your income. You just borrowed from your future for so long that you cant borrow anymore. You will just have to wait it out. Once you pay things down you will be comfortable.Human: Wow. Ive used unbury but only for CCs. Never seen the entire picture.I really appreciate the work you did for some random guy on the net. Youre absolutely right in that its all catching up to us. To this point weve made it work but we feel that with the money we make we SHOULD have more.Its eye opening and sad but we have to deal with it.  <response>: Well dont stress out too much. Your situation isnt actually too bad. Youve walked your family up to a cliff, but you didnt jump off. Amazingly, even with 150k in debt, you can be debt free in 4 years and have only paid 10k in interest. And thats assuming you just keep paying the minimum and living the way you are. You are very fortunate.It is inconvenient and uncomfortable to not be able to purchase the new house- but if you do, thats the tiny nudge that will send you over the side. Please dont do it. 4 years will go by quickly. Your littlest one wont even have started school. Youll be debt free. Youll have an extra 5k a month. You can start saving for retirement again. You could take your kids to DisneyWorld. Life will get better very quickly if you just wait. You can do it. 