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I do get a tax statement yearly from this account, but it's usually zero or pennies. I kind of want to kick myself for not acting on this sooner but apparently I didn't have control of this account until my MIL gave me the account number around the pandemic. I will ask the long-term investing thread for advice, thanks.
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Jan 27, 2024 15:03
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I accept that paying down debt with the higher interest rate is the smart way to go, but I'm having trouble conceptualizing exactly how that shakes out in this scenario: Given debt A with higher balance and higher rate and debt B with lower balance and rate, and a windfall amount that would pay off debt B, one could either Pay down debt A or Pay off debt B and and make that monthly amount an additional payment against debt A I...think if I know these figures then I can reason through it: -interest saved by putting the windfall amount against either debt -interest saved by putting debt B's monthly payment against debt A Am I on the right track?
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Jan 29, 2024 03:53
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The logical thing to do is to target the highest debt BUT there's something to be said about paying off another debt entirely that helps motivate you to keep pushing
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Jan 29, 2024 04:05
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Youre asking if debt snowball vs debt avalanche is better and many words have been said. Paying off the higher interest debt (avalanche https://www.investopedia.com/terms/d/debt-avalanche.asp) is mathematically better. Im assuming youre not a robot though and have feelings to consider.
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Jan 29, 2024 04:06
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The best plan is one you can stick with - if you get demotivated by having the smaller one and slip up its worse than paying a small premium. Keep on plugging away. Every dollar paid is 10 cents less interest you will pay that year. (or 3 cents or 30 cents. You get the idea.) Unless it's like <2.5% interest in which case it's costing you money. (Anything under your savings account interest rate less your income tax bracket.)
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Jan 29, 2024 19:21
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It sounds like the Yeti already knows their payment strategy and is just asking for a more intuitive mathematical explanation of why avalanche works better so they can feel confident in their choice. What you might wanna try is working out the differences with a spreadsheet or a calculator so you can see for yourself that it's better. From googling around there's an online calculator here that you can play around with to see the different lifetime payments you'll make in different scenarios. RPATDO_LAMD fucked around with this message at 21:10 on Jan 29, 2024 |
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Jan 29, 2024 21:00
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If you have the money to cover it easily either way, then paying down the higher interest debt will net you more money in the long run. However, if cash flow is an issue, completely paying off the lower interest debt will remove that monthly payment, and that's a valid reason to pick that option.
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Jan 29, 2024 22:17
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As others have alluded to one method is better from a math perspective while the other is better from an emotional and motivational perspective. In the end the best plan is the one you can stick to. How objectively good the plan itself is in a vacuum is not very important by comparison. Antillie fucked around with this message at 22:57 on Jan 29, 2024 |
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Jan 29, 2024 22:45
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Paying down the highest interest debt first is optimal if your goal is to have as much money as possible at the point where all the debt is paid off, but if you're optimizing for something different (e.g., cash on hand), then it might not be the best strategy.
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Jan 29, 2024 22:51
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RPATDO_LAMD posted:It sounds like the Yeti already knows their payment strategy and is just asking for a more intuitive mathematical explanation of why avalanche works better so they can feel confident in their choice. Yeah I prob should have been more clear  Im paying both of these down no trouble, its more that I find interest over time hard to grasp and Id think being able to see how those two scenarios shake out over time with my specific numbers would be educational. The math around how to see that is what Im having trouble understanding but that calculator seems like a good place to start.
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Jan 30, 2024 15:59
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the yeti posted:Yeah I prob should have been more clear Yeah just use the calculator for both numbers, I don't know if there's another way to put it. A dollar today that stops you from owing that dollar + $0.25 of interest next year is better than paying that same dollar to a different account that will only stop you from owing $1.00 + $0.10 next year (it's a bit more complicated with how interest compounds, but functionally it favors paying off the higher rate even more).Closing out the smaller account will not save you money because $1.00 * 0.25 is higher than 0.25 *0.25 + 0.75*0.10.
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Jan 30, 2024 17:52
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Is there a correlation between low Fixed Income, Bonds & CD yields vs growth in the S&P 500? I'm assuming that the lower the yield, investors would find other areas to invest their money including the stock market. Or is there no correlation here?
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Jan 31, 2024 13:11
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Handsome Wife posted:Spent a couple of hours on the phone with Ally this morning. The processing company (Fiserv) explicitly refused to accept a call because the check cleared (??). I opened a dispute with Ally over the payment but they say it will be 10 business days to get an initial determination. For anyone who was interested in this saga, its still ongoing (today marks a month since the check originally cleared). My dispute with Ally was denied because the check had cleared. Evidence suggests they did not do any meaningful follow up with Fiserv. I FINALLY got documentation from the credit union. Apparently 6 days after the check cleared, the Federal Reserve required them to return it because the routing number on the check didnt match the account it was being drawn from. There check was from Bank of America because something something Bill Pay. The credit union said they had been chasing this down and just gotten that reason, and that they had several customers with Bill Pay payments via BofA that had this issue. They said theyve been trying to work out the issue on their members behalf with BofA but theyve been completely unhelpful (I dont know why they waited for 3 weeks and hours of phone calls to tell me this). I took the documentation and sent it to Ally on Wednesday. I told them that since neither Fiserv nor BofA will speak to me (since Im not their customer) the ball is in their court. Yesterday morning I called to follow up, and was told they were waiting for a response from Fiserv. I told them I didnt have a lot of sympathy for them waiting for a response since this was something they should have done during the week and a half I was waiting for them to deny my dispute. I told them if I did not speak to someone who was able to give me a concrete path forward on this by COB yesterday theyd lost me as a customer (Ive been an Ally customer for 15+ years and have 6 figures with them). Long story short no one contacted me. I called again yesterday evening and the person hung up on me. So next week Im beginning the process of moving to a new bank, which I am not looking forward to. And I guess Ill keep calling them every loving day. Im strongly considering legal options. Currently at 43 days since the money left my checking account and still no one can tell me where the gently caress it is.
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Feb 3, 2024 15:31
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Lawyer time?
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Feb 3, 2024 15:32
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Handsome Wife posted:For anyone who was interested in this saga You've already reached out to the CFPB, who is their secondary regulator. Their primary regulator is listed as the Federal Reserve Board. https://www.federalreserve.gov/faqs/credit_12666.htm
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Feb 3, 2024 15:43
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Handsome Wife posted:For anyone who was interested in this saga, its still ongoing (today marks a month since the check originally cleared). Four weeks is relatively fast given Fiserv's normal standards, but yeah, completely unacceptable. I'm kind of amazed that Fiserv is cutting checks to a credit union large enough to offer competitive loans instead of ACHing the money, though.
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Feb 3, 2024 18:01
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Ham Equity posted:Four weeks is relatively fast given Fiserv's normal standards, but yeah, completely unacceptable. I'm kind of amazed that Fiserv is cutting checks to a credit union large enough to offer competitive loans instead of ACHing the money, though. I work in this industry and it's TERRIFYING how big check is still
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Feb 3, 2024 18:08
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Medullah posted:I work in this industry and it's TERRIFYING how big check is still Yeah, I used to until three years ago; even my relatively tiny-rear end landlord signed up with ACH for my credit union's bill pay vendor after long enough of having to deal with the checks, it's loving weird that a lender who apparently has multiple members using the same Bill Pay vendor--and that vendor is loving Fiserv--hasn't done that. I suppose it's not really relevant, but I'm very loving curious, Handsome Wife; if you talk to the credit union people again, can you ask them why they're getting checks instead of ACH?
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Feb 3, 2024 18:13
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Credit score question: My oldest card (Amex) is 15 years old (I got it in 2008), I have a second card I opened in 2022, and a vet emergency card from this year. They're the only cards I have, and I have 100% on-time payments. My credit score says my "longest length of credit" is 15 years everywhere except experian, who says I've only had (total) credit for 1.9 years with an average of 1 year old accounts. My actual Amex is STILL ON THERE, with its obvious 15-year credit history, but Experian still has me marked down as having only 2 years of credit. I filed a dispute, but is there anything else I can do? My score is literally 40 points lower on their website than everywhere else because of it.
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Feb 5, 2024 15:56
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Lieutenant Dan posted:Credit score question: My oldest card (Amex) is 15 years old (I got it in 2008), I have a second card I opened in 2022, and a vet emergency card from this year. They're the only cards I have, and I have 100% on-time payments. Nope. And if it ever comes up you can explain this to the creditor. When you get an offer with a not-the-best rate or denied call them and ask if length of credit was a cause for denial/penalty. Ask them to manually review your file or pull it from another agency due to a disputed inaccuracy in your Experian profile. Tell them you've had a credit card for 15 years with Amex but they aren't counting it for unknown reasons.
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Feb 5, 2024 18:09
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Got a question about car loans. If I can reliably afford big payments each month, which option is better for paying the least amount of money over the loan? 1. Get the lowest interest rate possible on a 2-3 year loan and have a large minimum monthly payment 2. Get the highest interest rate possible on a 7-8 year loan for the smallest possible minimum monthly payment, and then make aggressively high payments each month Assuming they somehow work out to pay the same money over the life of the loan, I figure option 2 might be optimal because if life goes sideways, I don't have a giant minimum payment weighing me down, but if things are fine, I can keep slashing down the principal.
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Feb 6, 2024 14:40
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Umbreon posted:Got a question about car loans. If I can reliably afford big payments each month, which option is better for paying the least amount of money over the loan? You're right that option 2 gives you more potential flexibility, but that flexibility costs you money and runs counter to your stated goal of wanting to spend the least amount of money possible. If you can pay off the loan in the same amount of time, option 1 will ALWAYS be less money spent.
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Feb 6, 2024 14:47
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Ancillary Character posted:You're right that option 2 gives you more potential flexibility, but that flexibility costs you money and runs counter to your stated goal of wanting to spend the least amount of money possible. If you can pay off the loan in the same amount of time, option 1 will ALWAYS be less money spent. I believe you, so I'm trying to find a good way to calculate so I can actually see the numbers myself and see exactly how much that flexibility would cost me. Would any random auto loan calculator do or is there a better way to find that out?
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Feb 6, 2024 15:36
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Umbreon posted:Got a question about car loans. If I can reliably afford big payments each month, which option is better for paying the least amount of money over the loan? Side question: do you have a sufficient emergency fund ? If the answer is no, you def want to fix that. Either way, higher interest rates are never good, so I wouldnt do option 2.
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Feb 6, 2024 15:46
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Umbreon posted:I believe you, so I'm trying to find a good way to calculate so I can actually see the numbers myself and see exactly how much that flexibility would cost me. Would any random auto loan calculator do or is there a better way to find that out? The PMT function in Google Sheets does what you want.
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Feb 6, 2024 16:06
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Duckman2008 posted:Side question: do you have a sufficient emergency fund ? Emergency fund is being replenished and should be back to sufficient by the end of next month. I guess the question now is what's considered a good interest rate? My credit score is in the 800+ range and I have a good debt to income ratio, so what should I be aiming for if I want to pay things off in about 3-4 years? E: ultrafilter posted:The PMT function in Google Sheets does what you want. Thanks for this.
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Feb 6, 2024 16:09
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Umbreon posted:I believe you, so I'm trying to find a good way to calculate so I can actually see the numbers myself and see exactly how much that flexibility would cost me. Would any random auto loan calculator do or is there a better way to find that out? Another consideration for this would be the length of time where you'd be underwater on the loan. If you choose option 2 (which I wouldn't do for a car, but am sort of doing on my house, so I understand the impulse) is that if a catastrophe occurred and you'd need to sell your car, being underwater on the loan complicates things a lot. Obviously if you were making large payments before that this isn't really a concern, but it's something to think about when gaming out scenarios.
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Feb 6, 2024 16:10
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Grumpwagon posted:Another consideration for this would be the length of time where you'd be underwater on the loan. If you choose option 2 (which I wouldn't do for a car, but am sort of doing on my house, so I understand the impulse) is that if a catastrophe occurred and you'd need to sell your car, being underwater on the loan complicates things a lot. Obviously if you were making large payments before that this isn't really a concern, but it's something to think about when gaming out scenarios. At a minimum, I need the car to get to work and I wouldn't consider selling it unless I'm already jobless anyway, but this is a fair point either way and wasn't something I was considering.
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Feb 6, 2024 16:16
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Umbreon posted:Got a question about car loans. If I can reliably afford big payments each month, which option is better for paying the least amount of money over the loan? How about not taking out a car loan and buying something less expensive with cash on hand? I know almost everyone gets a car loan, but almost everyone is in debt up to their eyeballs. Just because you have room for a big monthly payment doesn't mean you should do it.
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Feb 6, 2024 18:28
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daslog posted:How about not taking out a car loan and buying something less expensive with cash on hand? I know almost everyone gets a car loan, but almost everyone is in debt up to their eyeballs. I'm in a situation where I need to replace my vehicle ASAP despite it being perfectly drivable(expired registration and and a currently unfixable issue that will fail safety inspections. I've already been pulled over once for it). That, and I don't have much cash on hand yet, I just got a new job after a long period of unemployment. The job pays very well and I will have cash built up over the next few paychecks, but for my immediate situation, all I have is emergency cash that really shouldn't be going to a car.
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Feb 6, 2024 19:15
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Umbreon posted:I'm in a situation where I need to replace my vehicle ASAP despite it being perfectly drivable(expired registration and and a currently unfixable issue that will fail safety inspections. I've already been pulled over once for it). That, and I don't have much cash on hand yet, I just got a new job after a long period of unemployment. The job pays very well and I will have cash built up over the next few paychecks, but for my immediate situation, all I have is emergency cash that really shouldn't be going to a car. Then at the very least consider buying something like a high mileage Toyota Corolla, finance it with the goal of paying it off in the next 6 to 9 months. Then set aside 900 a month specifically toward the purchase of something nicer in 2 or 3 years. I love new cars , but the depreciation on them can make them a disaster over the long term. It's so easy to say to yourself "I work hard and have a good job, I deserve a new car!" When you run the numbers, it does not work out as well.
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Feb 6, 2024 19:26
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Umbreon posted:I'm in a situation where I need to replace my vehicle ASAP despite it being perfectly drivable(expired registration and and a currently unfixable issue that will fail safety inspections. I've already been pulled over once for it). That, and I don't have much cash on hand yet, I just got a new job after a long period of unemployment. The job pays very well and I will have cash built up over the next few paychecks, but for my immediate situation, all I have is emergency cash that really shouldn't be going to a car. I don't know your situation, but I feel like a sub-$3k car for 6 months/ a year that you then junk or sell for roughly what you paid for it would be best financially.
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Feb 6, 2024 19:41
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daslog posted:Then at the very least consider buying something like a high mileage Toyota Corolla, finance it with the goal of paying it off in the next 6 to 9 months. Then set aside 900 a month specifically toward the purchase of something nicer in 2 or 3 years. I don't know if this changes anything, but I plan to keep whatever new car I get for as long as possible. I've had my current car since 2013 and paid it off years ago, and the only reason I'm looking for a new car is because I literally can't fix my current one and driving it is a risk for a fat ticket or license suspension. Depreciation shouldn't be an issue because I don't want to sell the new car unless I have no other choice. Correct me if I'm wrong or missing anything. (And that being said, I'm looking to get a Chevy bolt as they qualify for the full tax credit and they're relatively cheap so I'll be able to pay it off pretty quickly.) Currently, I have no fixed debts(excluding utilities and food and whatnot)other than my mortgage payment and the remainder of a home improvement project, so I have plenty of room for a car payment while still having a comfortable amount for anything else that comes up.
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Feb 6, 2024 19:57
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Umbreon posted:Got a question about car loans. If I can reliably afford big payments each month, which option is better for paying the least amount of money over the loan? My memory is a little hazy, but the last time I had a car loan, I believe I was limited on the amount I could pay extra on the loan. I think it was up to one additional payment (so, my monthly payment was something like $300/month and I couldnt pay more than $600/month). I could be wrong on this and certainly different lenders will have different rules, but I wouldn't necessarily assume you can just pay as much as you want each month like you could with a home mortgage. A quick google suggests pre-payment restrictions are definitely a thing with car loans.
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Feb 6, 2024 20:01
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Umbreon posted:I don't know if this changes anything, but I plan to keep whatever new car I get for as long as possible. I've had my current car since 2013 and paid it off years ago, and the only reason I'm looking for a new car is because I literally can't fix my current one and driving it is a risk for a fat ticket or license suspension. Depreciation shouldn't be an issue because I don't want to sell the new car unless I have no other choice. Correct me if I'm wrong or missing anything. Can I ask what's currently wrong with your car?
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Feb 6, 2024 20:10
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while i dont think youre going to get a reliable used car for 3000 dollars, depending on whats wrong with your car it might be worth trying to get a loan for the repairs. it will almost certainly be cheaper than financing a new car, but how good or bad an idea that is also depends on the state of your car besides the needed repair
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Feb 6, 2024 20:14
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Umbreon posted:I don't know if this changes anything, but I plan to keep whatever new car I get for as long as possible. I've had my current car since 2013 and paid it off years ago, and the only reason I'm looking for a new car is because I literally can't fix my current one and driving it is a risk for a fat ticket or license suspension. Depreciation shouldn't be an issue because I don't want to sell the new car unless I have no other choice. Correct me if I'm wrong or missing anything. The path to long term financial success is being able to stay out of debt. When an emergency like your car needing replacement or your HVAC system in your house goes you want to be able to handle that from your savings instead of borrowing. It does sound like you have your mind made up though. I hope it works out for you! daslog fucked around with this message at 20:31 on Feb 6, 2024 |
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Feb 6, 2024 20:16
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drk posted:My memory is a little hazy, but the last time I had a car loan, I believe I was limited on the amount I could pay extra on the loan. I have not heard of that from anyone (though I'm sure some lenders do that). My last car loan, I paid off in two months, they didn't say poo poo to me. (needed to replace a car that got totaled, took me a little bit to withdraw the cash to pay for the car, so I paid that one month of interest)
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Feb 6, 2024 20:24
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DildenAnders posted:Can I ask what's currently wrong with your car? Right, I probably should have said that earlier, my bad. The issue is currently unfixable not because I can't afford it, but because the part required isn't available anywhere I can find. My car is a 2013 Hyundai Elantra, and the ABS module is broken alongside some sort of housing/casing that contains it. Every mechanic I've been to says the same two things, they can't fix it without replacing the module and casing, and no dealer has the module in stock. Coincidentally, there is an active recall from Hyundai for this exact issue, and it also is listed as "remedy not yet available". It's been this way since September with no change in sight. And give that my car has no power steering and 3 different warning lights on because of this, I severely doubt it'll pass the safety inspection. (I would very much love to be wrong though, please say so if I am) (Also, apparently my car can just randomly start a fire at any time, even with the engine off, according to the recall. No fires yet, but we can add that to the list of reasons I want to get a new car sooner rather than later) daslog posted:The path to long term financial success is being able to stay out of debt. When an emergency like your car needing replacement or your HVAC system in your house goes you want to be able to handle that from your savings instead of borrowing. Minds not quite made up yet, no. I'm just looking through my options and trying to learn more, but I'm certainly not about to charge into the nearest dealer anytime soon, I'm building up more cash first and researching what I can. I was worried I did a bit too much info dumping, but I see now I actually didn't give enough. Umbreon fucked around with this message at 20:38 on Feb 6, 2024 |
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Feb 6, 2024 20:30
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And you live in a state that requires working ABS to pass inspection?
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Feb 6, 2024 20:51
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