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Message
Was able to free up $1300/mo. What to do with it?
Posted on 11/3/19 at 11:51 am
Posted on 11/3/19 at 11:51 am
After all expenses and savings are accounted for, with the exception of vacation savings for a family of 3, I managed to free up $1300 a month. Here’s a break down of debts I owe.
Truck- $16k @ 2% @ $600/mo
My Student Loans- $14k @ 4% @ $200/mo
Wife’s Student Loans- $12k @ 4% @ 130/mo
That’s the only debt we have right now. Currently rent a home due to work, sold the previous home we owned. Max out retirement. Again, we haven’t budgeted for vacations. My initial thought is to allocate half of the $1300 to the truck note in order to free up the funds to knock out student loan debt and the other half will be saved for vacation money. Do I have this backwards? Thoughts?
Truck- $16k @ 2% @ $600/mo
My Student Loans- $14k @ 4% @ $200/mo
Wife’s Student Loans- $12k @ 4% @ 130/mo
That’s the only debt we have right now. Currently rent a home due to work, sold the previous home we owned. Max out retirement. Again, we haven’t budgeted for vacations. My initial thought is to allocate half of the $1300 to the truck note in order to free up the funds to knock out student loan debt and the other half will be saved for vacation money. Do I have this backwards? Thoughts?
14
Posted on 11/3/19 at 11:57 am to 13SaintTiger
Your student loans first
Posted on 11/3/19 at 12:47 pm to 13SaintTiger
Those are all pretty decent rates. I wouldn’t pay off the truck early, the student loans may have a psychological effect knowing they are gone.
Posted on 11/3/19 at 12:54 pm to 13SaintTiger
Depends on the rest of your picture imo. Do you have sufficient liquidity for emergencies? Are you planning to buy a home at some point and do you have down payment? How much would you like to save for retirement?
Those are low rates but I'd definitely pay on the student loans first. Whatever you allocate toward debt, focus on one loan at a time til paid off.
Those are low rates but I'd definitely pay on the student loans first. Whatever you allocate toward debt, focus on one loan at a time til paid off.
Posted on 11/3/19 at 1:06 pm to 13SaintTiger
Don’t touch the truck note with that low rate.
With the decent student loan rates and low notes, just double the note on each.
Put the rest toward travel. Live life and create memories with your family.
You can’t take the money with you when you die and you can’t get lost time back.
Don’t go all Dave Ramsey with the extra cash. Live.
With the decent student loan rates and low notes, just double the note on each.
Put the rest toward travel. Live life and create memories with your family.
You can’t take the money with you when you die and you can’t get lost time back.
Don’t go all Dave Ramsey with the extra cash. Live.
Posted on 11/3/19 at 1:41 pm to 13SaintTiger
Pay your loans off first in case you divorce wife
Posted on 11/3/19 at 1:49 pm to 13SaintTiger
Don’t pay off the truck early.
I’d toss an extra $1k/mo on the student loans and save $300/mo for travel.
I’d toss an extra $1k/mo on the student loans and save $300/mo for travel.
Posted on 11/3/19 at 2:45 pm to hungryone
I agree a 1000 on student loans the rest on family fun
Posted on 11/3/19 at 3:40 pm to 13SaintTiger
Add that $1300 to your student loans payments, in less than 10 months you will have no student loans and $1500 freed up.
Posted on 11/3/19 at 5:34 pm to 13SaintTiger
What does “maxing” our retirement mean? If that only means maxing our the IRA limits, I’d do something more toward retirement. Or maybe some toward a 529 plan. I wouldn’t be too worried about your current debts.
Posted on 11/3/19 at 7:08 pm to NaturalBeam
quote:
I’d do something more toward retirement. Or maybe some toward a 529 plan. I wouldn’t be too worried about your current debts.
Max the limit every year. While I’m not against doing something more towards retirement, I’m looking at a pretty nice pension upon retirement as well. Additionally, my kid’s college is already paid for.
Posted on 11/3/19 at 10:08 pm to 13SaintTiger
Good job. You seem reasonably squared away.
I’d pretend I didn’t have an extra $1300/mo for a while and just ignore it.
My experience has been I usually get great opportunities when I am least prepared for great opportunities.
I’m not disagreeing with anything here. I just wouldn’t be in a hurry to throw it at something. You’ll know when you know.
I’d pretend I didn’t have an extra $1300/mo for a while and just ignore it.
My experience has been I usually get great opportunities when I am least prepared for great opportunities.
I’m not disagreeing with anything here. I just wouldn’t be in a hurry to throw it at something. You’ll know when you know.
Posted on 11/3/19 at 11:59 pm to 13SaintTiger
Does "max the limit" include Roth IRAs? If not, fund one for you one for wife.
I'd put some of the excess into a taxable brokerage. Buy an ETF like VTI w/ low expenses ratio and doesn't create any capital gains until you sell unlike a mutual fund. You could use that $ for early retirement expenses before 59 1/2 and potentially pay 0% long term gains if your AGI is low enough. Otherwise, it's available for home purchase or other expenses.
I'd put some of the excess into a taxable brokerage. Buy an ETF like VTI w/ low expenses ratio and doesn't create any capital gains until you sell unlike a mutual fund. You could use that $ for early retirement expenses before 59 1/2 and potentially pay 0% long term gains if your AGI is low enough. Otherwise, it's available for home purchase or other expenses.
Posted on 11/4/19 at 7:54 am to 13SaintTiger
Be careful maxing out retirement - that will be raided by progressive politicians in the future. Diversify more - only do what company will match plus 5% then open IRAs look for an investment rental property etc
This post was edited on 11/4/19 at 7:55 am
Posted on 11/4/19 at 8:04 am to 13SaintTiger
quote:
Wife’s Student Loans- $12k @ 4% @ 130/mo
Do that one first, it will be done in a year, and you'll then have $1430 to throw at:
quote:
My Student Loans- $14k @ 4% @ $200/mo
Which will be done after another almost a year (November/December 2021) and then you'll have $1630 to throw at:
quote:
Truck- $16k @ 2% @ $600/mo
Which should only have a few thousand left.
Then, you throw $2230 into investments - but I would also set aside enough for a big trip sometime in 2022 to reward yourself for delayed instant gratification.
Posted on 11/4/19 at 8:41 am to 13SaintTiger
Me? I would put the $1300/month toward wife's student loans, then yours, then the truck.
Posted on 11/4/19 at 9:07 am to 13SaintTiger
Psychology wise - spoil the family on the first 1300
With a small or something then invest the rest in a broad market fund. You get he satisfaction of enjoying it while then building the base for future enjoyment.
With a small or something then invest the rest in a broad market fund. You get he satisfaction of enjoying it while then building the base for future enjoyment.
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