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You guys are amazing, thanks for the advice. So the stats for paying off the loan are: Current rate ($90/mo): paid off in 2023, total interest of $1622.45 Double Rate ($180/mo): paid off in 2018, total interest of $701.48 Put montly surplus into loan ($1k/mo): Paid off in 2016, total interest of $127.41 These are pretty compelling numbers. I think I am going to go ahead and put that $1k/month into paying off the loan, so I can be rid of it in 6 months and save $1500. Thanks again everyone.
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Aug 4, 2015 19:50
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Jmcrofts posted:You guys are amazing, thanks for the advice. Actual numbers as far as what's most advantageous is going to largely depend upon your AGI. If you're in a 0% bracket, you probably want to pay down the student loan first; if you're in a 40% bracket, you almost certainly want to max out an IRA and 401(k) first.
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Aug 4, 2015 20:03
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Thanatosian posted:Just FYI, your actual interest rate is probably lower than that, because I suspect you're making little enough money that you're eligible for the above-the-line deduction you get for student loan interest. Even if the math comes out close, with a 6 month payoff horizon, I'd want to just pay them off. Having no debt would have a dollar value to me over and above the actual monthly payment. It would allow things like the freedom to change jobs without fear it won't work out and such.
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Aug 4, 2015 20:23
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If you are in a very stable situation then one possibility is to use your savings to pay off the loan and then put the remainder of your extra into maxing a 2015 Roth IRA and savings.
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Aug 4, 2015 20:24
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Just found this thread, all of the advice I've seen has been helpful for me. Going to lay out our finances Debt - $200,000 owed on our house we bought in 2012 (4% interest) - $50,000 in wife student loans (6% Interest) Paying the minimum monthly - $10,000 in my student loans (4.25% interest) paying double the minimum - $10,000 owed on my car (I bought a lovely ford focus I pay 215 a month for) Income - My wife and I combined make a bit more then 165k before taxes - We contribute 4% to our 401k (which is matched at 4%) Savings - We currently have $25k in savings as a rainy day fund We had to move the $50,000 student loans to a 25 year plan back in 2011 because we would have never been able to buy a house paying that payment each month, and we didn't want to delay buying a house for 10 years. We also pay for daycare for my son ($1,100 a month), but currently we are bringing home an additional $1,500 or so each month. I'm not sure what to do with that additional income each month, should we just keep saving? What about the rainy day fund? Should I use any of that to pay down a debt? My wife is probably two years from needing a new car as well. We may look to buy a new house in the next 4-5 years, but that would probably depend on if we have a second child. If we do we would delay it by a few years due to daycare costs.
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Aug 4, 2015 21:12
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What's the interest rate on the car? Why are you paying more towards the student loans that have a lower interest rate?
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Aug 4, 2015 23:21
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moana posted:What's the interest rate on the car? Why are you paying more towards the student loans that have a lower interest rate? It may be to pay off the smallest loan first, but even then it may be a mistake based on the car loan rate, and if the student loan interest is tax deductible.
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Aug 5, 2015 00:24
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The car was 3.5% if I remember correctly. I was paying double because it was what I had always did. I guess it's because I felt like I was making a small dent, where the 50k loan I feel like is insurmountable. EDIT: Just called my auto loan company and I'm pay 2.34% and owe $9234.72 on the car. PhillyLucky fucked around with this message at 14:36 on Aug 5, 2015 |
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Aug 5, 2015 00:40
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SpecialK2 posted:I don't recall if it is in the OP or not, but you can use http://unbury.me to do this very easily.
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Aug 5, 2015 04:16
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I have an insurance question. My husband got a job in another state that we'll be moving for in mid-September. I'm a teacher, so I already put in my resignation for the upcoming school year. That means I will soon have no health insurance and might not for a while if I end up subbing after the move. I looked at enrolling through healthcare.gov, but it suggested that I might want to hold off if I'm moving to a different state soon. My husband thinks I should hold off on enrolling until we move and just retroactively use COBRA if something comes up. My insurance has always been taken care of through some combination of childhood poverty/university/work, so I know nothing about any of this and am feeling nervous. What's my best option?
facey fred fucked around with this message at 02:21 on Aug 7, 2015 |
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Aug 7, 2015 02:19
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themaninblack fucked around with this message at 06:47 on Apr 30, 2016 |
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Aug 7, 2015 06:03
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Here's a check to make sure I'm still thinking right Single, no kids, 29M, with a professional degree Income: technically 60k/year, but I occasionally do contract work. This year I'll probably end up closer to 80-90k. My total income will at a minimum triple-quadruple in 2017. Assets: 2010 Volkswagen GTI 10k emergency fund No retirement savings Loans: No credit card No car 150k at 6.8% (paying off, currently on ibr) 5k at 5% (paying off) 12k at 5% (paying off) 19k at 5% (paying off, very flexible) 14k at 2% (on hold until 2017) My question stems from what the best use of the "extra" income I get is. From now on, I'll pretty reliably bring in at least an extra $1500 a month, but it may be more. Between August and September, I'll bring in an extra 10,500, which works out to about 7500 net. My plan is to use the extra money to snowball the 5% debt because I hate the thought of monthly payments, and honestly whatever I save for retirement now seems inconsequential to what I can save later. Is that still reasonable? Residency Evil fucked around with this message at 07:48 on Aug 7, 2015 |
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Aug 7, 2015 07:40
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Residency Evil posted:Here's a check to make sure I'm still thinking right What are the debts? Are any of them student loans? Is one of them a mortgage? Are you making any charitable donations or anything that would put you above the standard deduction if you were to itemize?
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Aug 7, 2015 10:53
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Thanatosian posted:What are the debts? Are any of them student loans? Is one of them a mortgage? Are you making any charitable donations or anything that would put you above the standard deduction if you were to itemize? Sorry, they're all student loans, no mortgage. No donations big enough. Residency Evil fucked around with this message at 11:04 on Aug 7, 2015 |
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Aug 7, 2015 11:00
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Residency Evil posted:Here's a check to make sure I'm still thinking right Allow me to introduce you to a Google search that will answer your questions: White Coat Investor. Do yourself a favor and read the posts that go over the basics of living like a resident for a few years after residency. It's really easy to have an increase in lifestyle spending while still paying off your loans, saving for retirement, and avoiding the typical predatory healthcare expert bullshit.
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Aug 7, 2015 12:12
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balancedbias posted:Allow me to introduce you to a Google search that will answer your questions: I'm a huge fan of wci and that's partly why I've focused so much on paying off loans to this point. In this case, I'm still in residency, have some consistent extra cash as I get close to the end, and want to make sure what I'm doing still makes sense.
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Aug 7, 2015 13:18
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My mom's friends are telling her that she should set up a living trust on top of having a will. I haven't heard of this before and I'm not sure what it brings to the table that a will doesn't. Does she really need one? She's not super rich, and I just assumed that on her death that her stuff would get split up evenly amongst her kids (there's 3 of us)
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Aug 7, 2015 18:57
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Steve Yun posted:My mom's friends are telling her that she should set up a living trust on top of having a will. I haven't heard of this before and I'm not sure what it brings to the table that a will doesn't.
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Aug 7, 2015 23:08
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Thanatosian posted:You may want to ask a probate lawyer/accountant, but very generally speaking, living trusts are used to avoid estate taxes. The exemption for the federal estate tax is currently $5.43 million, so if her estate is not worth more than that, there is not likely to be a reason to set up a living trust. State estate taxes may apply, however; a local probate lawyer/accountant would be able to tell you more. Not really, for two reasons. First, there is a way for the executor of the estate to pass the first spouse's $5M exemption to the surviving one without a living trust, thereby doubling her exemption. This is what a living trust is commonly used for (a living trust NEVER avoids estate taxes, it just allows you to get around the spousal issue, which no longer is an issue). Second, by the poster's post, it sounds like the mother is not passing her estate to her spouse, but to her 3 kids, so a living trust doesn't even serve any estate tax purpose. A living trust is NOT generally used to avoid estate taxes at all, though it is one possible solution to optimize estate tax burden. It is more generally used to avoid probate, but also to provide conditions during times of incapacitation. If you have a will, a durable power of attorney, and healthcare directive, most people are very well covered for all their needs. I think the poster's mom's friends are just talking up living wills due to trendiness. If she has a particular estate concern, she should see a lawyer who does not push living trusts needlessly. 80k fucked around with this message at 00:52 on Aug 8, 2015 |
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Aug 8, 2015 00:36
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Steve Yun posted:My mom's friends are telling her that she should set up a living trust on top of having a will. I haven't heard of this before and I'm not sure what it brings to the table that a will doesn't. A living will has lots of advantages over a simple pour over will -Provides a way to hand over assets and management to another trustee, if the original trustee gets incapacitated. Without a living trust you would have to go through the legal system in order to establish conservatorship -Can easily be changed since it's a revocable type structure -assets get automatically distributed without the court system, extra legal costs or risk of probate court I would recommend just about everyone get lawyer to create a living will for their assets to all the above advantages. People tend to have the wrong impression of living trusts as something used by rich people to avoid taxes, the whole concept has lots of advantages making worth the effort for just about everyone especially if you substantial assets
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Aug 8, 2015 04:41
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Residency Evil posted:I'm a huge fan of wci and that's partly why I've focused so much on paying off loans to this point. In this case, I'm still in residency, have some consistent extra cash as I get close to the end, and want to make sure what I'm doing still makes sense. Anyone have any more thoughts, or is this the wrong thread?
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Aug 8, 2015 08:04
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ladyweapon posted:Thank you for this link! I was looking for an excel sheet someone posted a long time ago that did a more detailed version of this, but this is good for my needs too. If anyone has the spreadsheet or something similar, that would be awesome. It was something like input balance, interest, payment per month, and it calculated out how long it would take to pay off that card + the updated total (provided you didn't use it) for each other month in the series. I think it was posted in someone's financial thread here in BFC. I've sent that one to some thread-owners, its pretty user friendly. Residency Evil posted:Anyone have any more thoughts, or is this the wrong thread?
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Aug 9, 2015 02:25
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SiGmA_X posted:http://www.vertex42.com/Calculators/debt-reduction-calculator.html Well, I don't have any sort of 401k match right now, and I'm not using a Roth IRA at the moment. The 14 @ 2% is variable, max it can be is 6%. It might go up a tiny bit if the fed decides to raise interest rates.
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Aug 9, 2015 08:09
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Residency Evil posted:Well, I don't have any sort of 401k match right now, and I'm not using a Roth IRA at the moment. Your plan is fine. Snowballing the 5% will be effective as you'll remove the minimum payments if you pay them all off. It also feels good to eliminate them along with reducing the amount of paperwork and administration associated with them. No point worrying about the 6.8% at the moment as ibr will keep that under control.
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Aug 9, 2015 23:32
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Newb question number one: Are Vanguard ETFs good for short term investing? I have a few thousand dollars I'd like to invest in something, but I'd like the ability to cash out in a reasonable amount of time if it's ever needed (within a business day or two). I already have a Vanguard retirement account so I figured using their ETFs might work. Newb question two: Assuming I did invest in a Vanguard ETF, I might not necessarily want to use the entire $3k that you have to invest in the money market fund first. Is there anything stopping me from investing the initial $3k to meet the minimum, using $1k on an ETF, and then transferring the remaining $2k back to my bank account? Are there fees or something that I'm not seeing that would make it not worth it? Is this all a dumb idea and wouldn't even work?
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Aug 10, 2015 04:09
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I feel like I hosed up. But I probably haven't. So, some context. Last year my wife stopped working and is now a stay at home mother. She plans to stay that way until he starts school - so about another four years. Our income obviously went down from about $150,000 a year combined to about $100,000. This year, we made some huge milestones. I finally got rid of student debts. I started contributing $200 a month re-tax to my superannuation, (I'm in Australia). Combined, we have $48,000 in superannuation - I am 28 and my wife is 31. I feel like this is putting us well on track. (For those who don't know, my employer must put an additional 9.5% on top of my take-home pay into my superannuation. This with my $200 a month means I'm adding about 12.5% to superannuation every month). But because I paid off my student debt, and we're now free of debt of any kind, we went a little crazy with the spending these past few months. It's not huge, we have a six-month emergency fund, (around $17,000), and we're able to budget for ongoing expenses such as car repair, etc. But I planned to finish the year with $10,000 towards a house deposit on top of all our other savings. I'm only going to end up with $4,000 :\ It's stupid poo poo too. We've gone out for little weekend trips, bought a sound system we always wanted, etc. Maybe it's the years of the harsh commentary on this forum that have gotten to me, but I feel like a loving failure. On the other hand, we save 22% of our income every week, and after a four month break of buying my lunch every day I'm not making them again, so I'm putting us back on track. At the end of the year our net worth will be over $80,000. I don't know, I just look at everyone on this forum and feel like I'm so far behind. Part of the problem is that my wife's family lives overseas, and no matter what they *will* not fly to Australia. So we've had to spend thousands of dollars over the past six years going to visit family and poo poo. But maybe that's just an excuse. Is it too late at 28/31 to start accumulating more wealth? I just want to be further ahead than where I am. CelestialScribe fucked around with this message at 06:48 on Aug 10, 2015 |
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Aug 10, 2015 06:45
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I wrote this just a page or two ago, so I apologize for being repetitive, but my situation is: -Three years older than you. -Half your income. -$11,000.00 total savings -$44,000.00 in student loan and car debt And yet, I am very confident about my future. Maybe I am delusional, but with my spending habits going forward and the potential I have (really need to finish that CPA exam) I will have more than enough to have a fulfilling, happy life.
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Aug 10, 2015 17:41
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Samael Jackson posted:Newb question number one: Probably not, but I guess it depends on what you mean by "short-term." The shorter the timeframe, the greater the possibility that the market will tank and you'll lose a significant portion of your money. Samael Jackson posted:Assuming I did invest in a Vanguard ETF, I might not necessarily want to use the entire $3k that you have to invest in the money market fund first. Is there anything stopping me from investing the initial $3k to meet the minimum, using $1k on an ETF, and then transferring the remaining $2k back to my bank account? Are there fees or something that I'm not seeing that would make it not worth it? Is this all a dumb idea and wouldn't even work? There isn't a minimum amount you have to put in a money market fund. Most of Vanguard's mutual funds require $3k (although ETFs don't), but a money market fund is just an account that is used to transfer money to before you can buy any shares. You can transfer any amount to it.
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Aug 10, 2015 18:11
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CelestialScribe posted:Is it too late at 28/31 to start accumulating more wealth? I just want to be further ahead than where I am.
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Aug 10, 2015 18:17
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Samael Jackson posted:Newb question number one: An ETF is just a vehicle... If it is liquid enough, they can be sold quickly and at virtually no cost. The suitability for a short term holding depends on the investment. For instance, BSV is a Vanguard ETF that invests in short term bonds (treasuries, agency, and investment grade). This is suitable for a fairly short term investment though a bank account is better.
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Aug 10, 2015 18:45
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CelestialScribe posted:Is it too late at 28/31 to start accumulating more wealth? I just want to be further ahead than where I am. I started saving at age 28, but thanks to an underwater mortgage my net worth didn't turn positive until I was 30. At 32 now it's around 40k and should be going up by 50-60k a year from now on. You're doing pretty well in my opinion.
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Aug 10, 2015 21:18
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moana posted:You sound like you're doing fine. This forum is full of people who love to chat about personal finance, of course we're going to be skewed higher when it comes to savings. Do you have a goal like FI that you're working towards? For most people, saving 20% is plenty as long as they plan on working for a while. If you wanted to retire in ten years, you'd need to do more, of course. Yeah my goal is 100,000 towards a house on eight years. And I'm on track for that. Maybe I just needed a little perspective!
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Aug 10, 2015 21:20
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CelestialScribe posted:Yeah my goal is 100,000 towards a house on eight years. And I'm on track for that. I have 200k in student loan debt and won't start making a significant salary to pay it off until I'm 31. You'll be ok.
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Aug 10, 2015 21:36
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CelestialScribe posted:Is it too late at 28/31 to start accumulating more wealth? I just want to be further ahead than where I am. After starting my business and trying to build that I only really started trying to get a decent return on my money at 38. I was 30 when I'd cleared out my student loan. So I wouldn't get too worried. In the worst case I've seen people turn their finances around at 50 or 55 to try to have enough to have a reasonable retirement and do alright. A good 35 years of compounding gains will work well.
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Aug 10, 2015 23:11
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moana posted:You sound like you're doing fine. This forum is full of people who love to chat about personal finance, of course we're going to be skewed higher when it comes to savings. Do you have a goal like FI that you're working towards? For most people, saving 20% is plenty as long as they plan on working for a while. If you wanted to retire in ten years, you'd need to do more, of course.
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Aug 11, 2015 00:15
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I'm on the way to positive net worth -- got 40k in student loans at low rates that I'm not too worried about. Recently got a nice bump at work and went from making 52k to 60k -- I had about 11k in 22% cc debt that I have cut in half to $6,000 across two cards. One card is now balance-free, and the $6,000 is on the other card. I can do a 0% balance transfer to the clean card for like $200 (the 4% fee) and easily could pay it off within the year of 0%... I should just do this, right? There's no obvious downside I am missing here? Additionally, I'd like to get the rates lowered on both of these cards, is there some info on the best way to go about doing that? Any way I can leverage this debt along with that ("lower my rate or Im just going to balance transfer and close this card" kinda thing)? Thanks thread.
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Aug 11, 2015 13:42
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Is Mint not pulling transactions for anyone else? The account values/debts are right, but no transactions have come over me for in almost a week.
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Aug 11, 2015 14:20
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Mint is buggy as hell and at any given time it's broken as poo poo for a significant number of people, but never everyone at the same time.
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Aug 11, 2015 15:59
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Does anyone have any advice about how to choose an insurance company for term life insurance? Any company you recommend (in the US)? There are so many, and other than comparing quotes and making sure they have a good rating, I'm a bit lost on how to decide.
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Aug 11, 2015 16:02
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Turkeybone posted:I'm on the way to positive net worth -- got 40k in student loans at low rates that I'm not too worried about. Recently got a nice bump at work and went from making 52k to 60k -- I had about 11k in 22% cc debt that I have cut in half to $6,000 across two cards. One card is now balance-free, and the $6,000 is on the other card. I can do a 0% balance transfer to the clean card for like $200 (the 4% fee) and easily could pay it off within the year of 0%... I should just do this, right? There's no obvious downside I am missing here? Just balance transfer, its far easier than getting your current company to give you a 0% rate. Check out the Chase Slate card, no balance transfer fee and 0% APR for 18 months.
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Aug 11, 2015 17:00
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