Intro and Personal Finance Advice

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Topic Author
Goznellus
Posts: 17
Joined: Tue Jan 29, 2019 4:03 pm

Re: Intro and Personal Finance Advice

Post by Goznellus »

Attention to anyone following my thread!

We have 100% paid off all credit card debt! We started with over $10,000 at the beginning of this thread. All spare money went directly to these cards. We finished the last credit off by taking money out of savings. Feels great!

Next up is to figure out the best possible way to get rid of my car. I am upside down on the loan. I currently owe $12,142.51. Kelly Blue Book says my car is worth anywhere between $7500-$10,000. What's is my best course of action to get rid of this thing?

Thank you to everyone who has contributed to us getting out of credit card debt.

Also, we socked away $5,000 to buy a house at some point in the near future. We took about $3,000 from this to put toward the credit cards. Should we build that back up or get rid of the car first? We still have a separate $1,000 emergency fund.

Thanks!
kelvan80
Posts: 244
Joined: Sun Jan 12, 2014 10:06 pm

Re: Intro and Personal Finance Advice

Post by kelvan80 »

How many months of your snowball to just pay off your current car? Did you guys keep the gym membership?
Topic Author
Goznellus
Posts: 17
Joined: Tue Jan 29, 2019 4:03 pm

Re: Intro and Personal Finance Advice

Post by Goznellus »

We kept the 19.99 gym membership but got rid of the $150/month membership (it was for MMA).

We should be able to snowball about $750/month. This leaves 16 months to pay it off completely. Plus we will put side hustle money toward it as we can. Probably an extra 200-300/month i'm guessing. So this would lower it to about 10-12 months.

Do you think the best course is to just completely pay it off in one year, then sell it and buy a used car from the proceeds?
LongHauler
Posts: 3
Joined: Fri Apr 26, 2019 5:21 pm

Re: Intro and Personal Finance Advice

Post by LongHauler »

Listen, you're doing great but there are a few things you can do to improve your situation even more.

1. Doesn't quite sound like you're really following Dave, it sounds like you're categorizing your debts into credit cards, car, students loans, etc. You should be listing your individual debt balances smallest to largest. Split those 13 student loans out and go after the little ones first. You'll feel SO good when you pay off 7 of them in the first month! See what I mean? Then move on to your car when all balances smaller than the car are paid off. Then maybe you'll pay off the car and go back to bigger student loan balances.

2. It sounds like you still have some extra cash lying around because you took $3,000 from a $5,000 house down payment fund. So there's $2,000 sitting somewhere. If you're following Dave (which works!), you need to look closely at how much money you have in savings or non-retirement accounts. Do what he says and drain them all down until you leave yourself the $1,000 "starter" emergency fund. Use everything except that $1,000 to put toward your smallest debts and work your way up to bigger debts.

3. There should be no "fun money" at this point. You're still broke. Let's designate your $19.99 gym membership your monthly "fun" and otherwise work and sleep. If you have Amazon Prime there are a billion things to watch online. Make some popcorn and have fun that way.

4. Right now it looks like you have roughly $88,000 of debt remaining (cars + student loans). You've just told us that you paid off $10,000 in three months (since the beginning of the thread), so I'd recommend you work like crazy at your second jobs and keep going as long as you can stand it. Selling the car is a huge hassle and you may be able to keep it if you just keep your income up and devote two years to ALL the debt.

5. And for God's sake, don't invest one penny in a 401k or IRA right now. Temporarily give up the measly match and divert ALL your money to pay off your debt. I've been lurking here for a while before joining today to respond to you, and I can see that the folks here are super knowledgeable. But they are very investor-focused... which is great if you have money to invest. You don't! You only have money for paying debt right now. Once you're debt free, keep grinding it out to get your 3-6 months of expenses set aside (emergency fund), THEN invest 15% of your gross annual household (married) pay and listen to the experienced investors here.

6. Save for every future (used) car and never use a stupid credit card again.
RetiredNewbie
Posts: 73
Joined: Sun Dec 10, 2017 7:52 am
Location: Southeast Virginia

Re: Intro and Personal Finance Advice

Post by RetiredNewbie »

I hear the sound of incoming eggs and tomatoes. It may be time to duck.
Your attitude about risk changes significantly when the bear begins to maul you.
Mr.BB
Posts: 1572
Joined: Sun May 08, 2016 10:10 am

Re: Intro and Personal Finance Advice

Post by Mr.BB »

Goznellus wrote: Fri Apr 26, 2019 11:15 am Attention to anyone following my thread!

We have 100% paid off all credit card debt! We started with over $10,000 at the beginning of this thread. All spare money went directly to these cards. We finished the last credit off by taking money out of savings. Feels great!

Next up is to figure out the best possible way to get rid of my car. I am upside down on the loan. I currently owe $12,142.51. Kelly Blue Book says my car is worth anywhere between $7500-$10,000. What's is my best course of action to get rid of this thing?

Thank you to everyone who has contributed to us getting out of credit card debt.

Also, we socked away $5,000 to buy a house at some point in the near future. We took about $3,000 from this to put toward the credit cards. Should we build that back up or get rid of the car first? We still have a separate $1,000 emergency fund.

Thanks!
Congratulations on paying off the credit cards, that that's huge! You can always sell your car to CarMax. Personally, I wouldn't worry about the house right now, you need an emergency fund. Create at least a six-month emergency fund. Never, ever touch it unless it is an emergency!! And I would start getting a little bit into your 401k if you can. When you look at the numbers, 40 years out the money you put in now will make a huge difference jus;t do a basic total stock market index fund.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
Topic Author
Goznellus
Posts: 17
Joined: Tue Jan 29, 2019 4:03 pm

Re: Intro and Personal Finance Advice

Post by Goznellus »

Goznellus wrote: Fri Feb 01, 2019 4:52 pm
Debts/Loans: Total amount of debt: About $99,000.
-Student Loans: $65,000
-Interest rates range from 3%-6.8%
-2 Cars (both financed): $24,000 Combine
-Interest rates are 4% and 5%
-Credit Card Debt (spread across 4 cards): $10,000
-Interest rates range from 14%-25%
The monthly expenses I calculated include the minimum payments for all debts/loans. Most of our credit card debt is due to our wedding.
Just an update:

I know it has been quite a while. But we have made a serious dent in our debt. I started this thread 2/1/2019 with $99K in debt. We are now down to $59,440 as of 12/16/2020. It's all student loans. We paid off my wife's car and I got rid of mine. Downgraded!

Discipline pays off. My second side hustle took off. It is generating way more money than my main job now. Ready to see where we land at the end of 2021!
Mr.BB
Posts: 1572
Joined: Sun May 08, 2016 10:10 am

Re: Intro and Personal Finance Advice

Post by Mr.BB »

Goznellus wrote: Wed Dec 16, 2020 3:03 pm
Goznellus wrote: Fri Feb 01, 2019 4:52 pm
Debts/Loans: Total amount of debt: About $99,000.
-Student Loans: $65,000
-Interest rates range from 3%-6.8%
-2 Cars (both financed): $24,000 Combine
-Interest rates are 4% and 5%
-Credit Card Debt (spread across 4 cards): $10,000
-Interest rates range from 14%-25%
The monthly expenses I calculated include the minimum payments for all debts/loans. Most of our credit card debt is due to our wedding.
Just an update:

I know it has been quite a while. But we have made a serious dent in our debt. I started this thread 2/1/2019 with $99K in debt. We are now down to $59,440 as of 12/16/2020. It's all student loans. We paid off my wife's car and I got rid of mine. Downgraded!

Discipline pays off. My second side hustle took off. It is generating way more money than my main job now. Ready to see where we land at the end of 2021!
:beer
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
User avatar
JupiterJones
Posts: 3000
Joined: Tue Aug 24, 2010 3:25 pm
Location: Nashville, TN

Re: Intro and Personal Finance Advice

Post by JupiterJones »

Thanks for the update, Goz!
Stay on target...
Sagefemme
Posts: 129
Joined: Mon Mar 12, 2018 9:31 pm

Re: Intro and Personal Finance Advice

Post by Sagefemme »

Good for you sticking with your plan. It's not easy to stop using/pay down credit cards. Although easier since COVID, no restaurants to go to, right?
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