If there is one thing that is guaranteed to keep me up at night, it is money- and the lack thereof.
Perhaps it is not so much the fact that there is simply not enough of it in my life so much as it is that I do not have in my posession at this very moment the amount needed to pay off all of our debts immediately. Really, I shouldn't be too anxious since, thanks to our 13 pound little tax break, our tax return was big enough to wipe out almost two of our monthly bills, which puts us ahead of schedule with our snowball plan. Since we are withholding taxes from our paychecks at a higher rate, next year's return should be pretty nice as well. But when it comes to how we can best spend it, I feel like I am on a see-saw: should we use it to wipe out the rest of our debts, or make a down payment on a house? Since I have a year to stew on it and allow our bills to decrease, I suppose it depends on how much we get back, how much we have left to pay off, and what the housing market looks like at the time. If it is bad, then I imagine we will keep saving until it is better.
I feel like I'm on the same teeter- totter when it comes to paying bills down faster. I am a big fan of just throwing a huge chunk of money at the bank and watching the balance drop considerably. unfortunately that requires patience, of which I have little when it comes to money. Should I just keep making minimum payments and throw the rest in savings until there is enough to wipe out a bill? or snowball payments gradually until everything is paid off? likely our savings wouldn't really increase all that much. I want it paid off ASAP, but I have also learned from hard experience that it is not wise to pay bills off faster than your family can afford to, because it starts the cycle over again.
I want to be free from debt when I finally finish college. I'm really grateful for the progress we've made so far. we've been married for a year and a half, and almost 3/4 of our debt is gone. Ok, so almost all of it so far has gone towards Matt's mustang (which we don't have anymore and have continued making payments on for the last 10 months), but it is still faster than I imagined possible. And we have been incredibly blessed in the process- moving into a decent apartment, having a healthy little girl, good employment, and many other things. Still working on an AFFORDABLE decent vehicle, but at least we have more than one running auto right now.
I have a hard time planning for the future. It is hard for me to sit and be patient, and allow goals which require an extended amount of time to be accomplished to happen. So in a desperate attempt to convince myself to be patient, I just need to relax. Time will pass, and it will never come back. So it is time to make the most of the time I have right now.
if you have the ability, pay a little extra towards the principle each month (and keep saving a little bit if you desire). you won't see the drastic effect we all like to see, but those little bits will add up and help you pay off your debts a little bit sooner. if one has a higher interest rate than you might consider focusing on paying a bit extra on that one rather than worry about one with a low interest rate. and I don't recommend buying a house until you feel like your expenses are well under control. buying a house is always more expensive than it seems (upfront costs, maintenance, higher utilities, etc.) but you can start thinking about what monthly payment you can afford and thus how much you can spend and thus how much you need for a down payment and closing costs. hope that helps a little bit!! :)
ReplyDeleteSo here is my two cents on your money delemas. Number one when we bought our house we had about 9 grand in the bank and owed about 8 grand on my mustang, the morgage people told us to pay off the car instead of using it for the down payment because it wasn't enough money to be 20% of the house and paying the car off made our debt to income ratio better.
ReplyDeleteNumber two you should read, "the total money makeover" by dave rasmey it states the best ways to save and pay on debt. That is what Brady and I do (most of the the time) and we are doing pretty good.