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htownjeep 
LSU Fan
Nassau Bay, TX
Member since Jun 2005
2211 posts
| Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 10:02 am)
Year end bonus at the end of Jan will afford me to pay off every bit of debt I have. I have heard I should keep very small balances on credit cards and use them once a month just to show activity. Is that true?
But, the main reason I'm posting is that I will have about 2k extra every month over and above what I'm currently saving (10% of my check goes into savings every payday). I want to custom build a house in about 3 years so I was thinking of going ahead and buying land. Is that a good idea or should I sock the money away and a few years down the road buy land and start to build?
Any ideas are welcome.
This post was edited on 1/8 at 10:03 am
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Vols&Shaft83 
Tennessee Fan
Member since Dec 2012
3281 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 10:07 am to htownjeep)
quote:
I have heard I should keep very small balances on credit cards and use them once a month just to show activity. Is that true?
I'm not sure how true it is, but I've heard it's good to leave them open if you're planning on getting a mortgage, even if you don't have a balance or use them.
I have 1 card open that hasn't been used in 2 years, and I haven't had a loan in almost 3, my credit score hasn't dropped a single point.
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SLafourche07 
USA Fan
Member since Feb 2008
855 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 10:10 am to htownjeep)
quote:
Will be totally debt free in about three weeks. Where to put extra $?Year end bonus at the end of Jan will afford me to pay off every bit of debt I have. I have heard I should keep very small balances on credit cards and use them once a month just to show activity. Is that true?
I wouldn't leave a balance on it. Pay off the card and just use it to buy gas once a month. If it's a rewards card I would use it for all purchases and pay off in full at the end of the month (what me and the wife currently do). That's if you are good with money and have self control.
quote:
But, the main reason I'm posting is that I will have about 2k extra every month over and above what I'm currently saving (10% of my check goes into savings every payday). I want to custom build a house in about 3 years so I was thinking of going ahead and buying land. Is that a good idea or should I sock the money away and a few years down the road buy land and start to build?
Depends. If you find a good piece of land for a good price and are certain on the area then go for it. But don't just buy land now because you want to build a house in a few years.
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htownjeep
LSU Fan
Nassau Bay, TX
Member since Jun 2005
2211 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 10:20 am to SLafourche07)
quote:
If you find a good piece of land for a good price and are certain on the area then go for it. But don't just buy land now because you want to build a house in a few years.
Yeah, that's the thing. There are some up and coming neighborhoods where I want to build. I'd have to buy two lots to have it how I want it. But the rub is what if things change in 3 yrs? Job, the area, etc. It might just be smarter to wait. But then again, if it's all good in 3 years then I'll be kicking myself because I could have the land paid off and only worry about the $ for the house.
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SLafourche07
USA Fan
Member since Feb 2008
855 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 10:50 am to htownjeep)
quote:
But then again, if it's all good in 3 years then I'll be kicking myself because I could have the land paid off and only worry about the $ for the house.
You'll also have the money that you would have used to buy the land sitting in a savings account.
If I were you I would find out how much the land is going for in the neighborhoods you are looking at and figure out what a payment for that land would be and then put that amount away into savings until you are more sure on the future.
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jmtigers 
Southern Miss Fan
1826.71 miles from USC
Member since Sep 2003
3215 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 10:54 am to SLafourche07)
quote:
SLafourche07
Winner!
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matthew25 
Ole Miss Fan
Member since Jun 2012
1529 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 10:57 am to SLafourche07)
If you want the land, and interest rates are near bottom, why would you wait? Also, factor in taxes/insurance/grass cutting? on the land for the time it is idle.
If you do purchase, then you can get someone to draw house plans, landscaping etc.
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txtiger21
LSU Fan
Dallas, TX
Member since Jul 2010
202 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 11:01 am to htownjeep)
quote:
I have heard I should keep very small balances on credit cards and use them once a month just to show activity. Is that true?
Sounds like you are good with your money so I would recommend getting a rewards cc and using it for all of your purchase to get 1%+ cash back. It can really add up.
You NEVER need to keep a balance on a card though. That means you pay interest. Ideally you want to have 1-9% of your limit report on your statement each month and pay in full after you get the statement so that you never pay interest. This shows that you are using an ideal amount of your available credit and will boost your credit score.
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SLafourche07
USA Fan
Member since Feb 2008
855 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 11:13 am to matthew25)
quote:
If you want the land, and interest rates are near bottom, why would you wait?
quote:
But the rub is what if things change in 3 yrs? Job, the area, etc. It might just be smarter to wait.
He doesn't sound very resolute.
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htownjeep
LSU Fan
Nassau Bay, TX
Member since Jun 2005
2211 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 11:20 am to SLafourche07)
quote:
He doesn't sound very resolute.
Yes, the problem is I'm a little leery of what the situation may be in 3 yrs. I'll probably go with your scenario and put the money somewhere. Ideas on that? I just want to force myself to invest it if I'm not going to buy the land. That will prevent me from having a temporary lapse of reason and buy a boat or RV or something stupid!
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SLafourche07
USA Fan
Member since Feb 2008
855 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 11:27 am to htownjeep)
I would open a separate savings account. If that would still be too tempting maybe just open up an investment account and put it in some index funds.
Or I can hold on to it for you if you don't trust yourself. 
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guttata
LSU Fan
prairieville
Member since Feb 2006
18250 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 11:29 am to htownjeep)
I've never owned a credit card and also have never had any trouble being approved for financing.
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ItNeverRains
LSU Fan
Franklin, TN
Member since Oct 2007
4607 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 11:44 am to htownjeep)
You'll need 20% on non rural land, may need for rural as well, I'd talk to lender to see req's
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foshizzle
LSU Fan
Member since Mar 2008
25135 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 12:22 pm to htownjeep)
quote:
I want to custom build a house in about 3 years so I was thinking of going ahead and buying land.
Get the mortgage now if you can. Rates like this will not last forever.
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buddhavista
Member since Jul 2012
3543 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/8/13 at 4:49 pm to SLafourche07)
quote:
I wouldn't leave a balance on it. Pay off the card and just use it to buy gas once a month. If it's a rewards card I would use it for all purchases and pay off in full at the end of the month (what me and the wife currently do). That's if you are good with money and have self control.
Definitely keep the credit card, worse cases its nice to have for emergencies or large purchases. I was debt free for 7 years until december, when I purchased a new car. I only did this b.c to get the bonus cash you had to finance. I will pay it off in the next few weeks.
its a great feeling and congrats. 
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Bill Parker?
Member since Jan 2013
646 posts
| re: Will be totally debt free in about three weeks. Where to put extra $? (Posted on 1/11/13 at 1:54 am to buddhavista)
If you have a family and think you might relocate in a few years, don't buy lots now. Rates will eventually increase, but try to put that out of your mind (which is about impossible to do).
Here is the reason why: As hard as it is to rationalize, you are buying a home and not a house. You will need to find the right area.
Now if you are single or without kids, you can approach it slightly differently.
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