Should I build up savings or pay down debt?
The question
Due to my partner’s unemployment coupled with house emergencies, car repairs, and medical bills, my debt to savings ratio has inverted. I used to have only a mortgage and student loans, with over 10k in savings. Now, but, I have over $ 13,000 in debt (credit card and personal loans), with less than $ 100 in savings.
I can afford EITHER to make minimum (or just SLIGHTLY above minimum) payments and try to build my savings back up, or cut way back on savings payments and pay my credit card bills off quicker. I’m going to list the bills, to help you help me:
CC1: $ 1,000 at 16.9% (min=$ 15/mo)
CC2: $ 6,815 at 0% until Jan 2012 (min=$ 105/mo)
CC3: $ 1,106 at 20.24% (min=$ 40/mo)
CC4: $ 1,870 at 15.24% (min=$ 105/mo)
Personal loan: $ 2,350 at 8.99% (min=$ 90/mo)
Student Loan 1: $ 26,756 at 3.5% (pmt=$ 340/mo)
Student Loan 2: $ 13834 at 5.875% (pmt=$ 145/mo)
Mortgage: approx $ 46,500 at 6.125% (pmt=$ 570/mo).
I have already budgeted to increase CC1 and CC3 to $ 50 a month.
My savings account makes about 1.75% interest. In a perfect world, if I had a decent amount in there, I would stop putting MORE in, and just pay off the credit cards. But with NO savings at all, I don’t know what to do. These cards are nearly all maxed out, so if there is another emergency, I’m lost.
Thanks,
Kate
6 months of emergency spending would take me, even saving everything I can, another year.
Sorry for the typo…1% on the savings. It was 1.75% last year or so. I go through ing direct.
And I try to avoid the credit cards, but when you run out of $ and the brakes on your car go, or you get a hole in the roof, you have to use them.
Best answers:
You will then have a loan of $ 13,141 and a mortgage of 46,500 and student loans that you can start to reckon about in 2012. If you speak to client services at the student loans and clarify what is happening, they may extend the 0% for a period of time.
If your bank cannot help you with budget plotting, visit several banks. As you are a potential excellent customer, banks will be pleased to help you in the hope that you will transfer your business to them.
Should I open a 529 or savings account for my niece?
The question
My niece was born January 29th, 2011, so she’s not even four months ancient right now. I saw how hard my parents worked to try to help me out with college tuition, but most of my schooling was paid for with loans that I’ll be paying on for, seemingly, the rest of my life. My mom still tries to help here and there, sending them a check once in a while since I’m working a pretty low-paying job right now between my undergrad and grad school, but I’d like it if my niece could go to college without my brother struggling to pay for it, and without her having to take out as many loans as I did. I don’t plot on having any children of my own, and I don’t have any other nieces and nephews, so I’d like to start this for her straight away. I’ve found ancient posts about 529 accounts being the best bet, but they were from ’07 and I’m not sure if that would still be a excellent option now as we’ve been watching 401k plans lose money for years now. Would I be better off with a high-yield savings account instead? I’d prefer that this be something I can’t easily withdraw from, because I don’t want to be tempted to ever use this in the case of a financial emergency. I have other resources to use in case of financial hardship, so I just don’t want to be able to even consider this money mine. Also, has anyone used Upromise.com to save money based on spending? It seems to work a lot like an airline miles or a cashback credit card. I just happened upon it from a search engine, and looked over their website, but I’d like to hear some real feedback on any success people have had from it, or hidden strings they finished up finding. Thank you!
In case it’s relevant: we live in Wisconsin, I am a state employee and college graduate, niece’s mom and dad are both employed, but receive state help as they did not have insurance through their workplaces. I have honest-excellent credit for a 25 yr ancient. It’s taken some hits the past couple years as my student loans have come out of deferral and I bought a new car, but it’s at least in the upper 600s still. I will be going back to school for an MBA and law degree next (2012) fall.
Best answers:
Too young to get married?
The question
I know this question has been questioned a few times, but I also know that different conditions and different maturity levels mean different answers. Here it goes:
My fiance and I have been dating for 3 years, and just got engaged about two months ago. We’ve set the date for June 9, 2012. I am currently 20 and he is 22. My issue is that a few people that have heard we’re getting married say we’re too young. By the time we really get married we’ll both be a year, nearly two, older.
A small background in rank:
Once again, we’ve been dating for 3 years. We went in together after about only 6 months (I went out when I was 17, having issues with my parents, who are now my best friends. Incredible what getting out of each others hair can do!). We both went to a tech school, and are both already graduated. He has a full time job and a part time job, and I have a full time job, but my benefits are paid. We don’t make a whole lot, but after what we lived on when we were going through school, we’re living quite comfortably. We’ve always paid our own bills, no help from parents. We’re never late on our car payments, rent, or student loan payments. Between both of us, we have one credit card, and that’s for emergencies.
Basically, I’m wondering what exactly constitutes an apt age to get married. From the inside looking out, it seems to me that we’re financially stable, we’re both educated, we like each other very much and respect the other’s opinions/thoughts, etc. Maybe I’m just not seeing an issue that someone that’s not in the link sees.
Best answers:
if you guys are deeply in like, then go ahead!
your biological clock is already tickin!
Marrying at your age is like a twelve year ancient marrying.
Wait until you know what life has to offer before you make your choices. You haven’t even seen the menu and you’re ready to order.
Related Links
- FAQ: Is consolidating federal college loans a good idea? Federal College Loans 2012
- As a teacher, can I qualify for BOTH Public Service and Teacher Loan Forgiveness Programs?
- FAQ: Can anyone offer advice and/or personal experiences regarding consolidating federal AND private student loans? Consolidate Federal And Private Student Loans Together 2012
- is my lender bank of america or great lakes? Great Lakes Bank Student Loans 2012
- FAQ: Is student loan money sent directly to the school, or to you? Do you need to apply each school year? Student Loans Sent Directly To You 2012
First of all, stop using your credit cards for anything. They make it too simple to spend money.
Write down your debts in order by the percentage interest rate you are paying.
Pay everything you can at the highest rate card, making sure you pay at least the minimum on the other debts.
As soon as that first debt is paid off use the amount you were paying on it to pay on the next card on the list, always making sure you pay at least the minimum on the other cards.
Keep doing this until all of your high interest rate debt is paid off. (credit cards)
Once your credit cards are paid off you can either attack your personal loan in the same manner or start building your savings. If it were me, I wouldn’t worry about the student loans until I had an emergency fund built up. When you do choose to start paying them down pay most on the one with the higher interest rate.
I say start by building up $ 1,000 in savings so next time the car breaks down you have the money to cover it without relying on debt – or even to help if the mortgage is due the day before payday. Find out if the terms of the 0% introductory rate card – what’s the interest rate after Jan-12 and is the back interest accrued or does the interest calc start from that time on? Also see if you have any options on the student loan, like switching to an extended payment plot or possibly even applying for a deferment – either option will cost more in the long term, but it will lower the minimum monthly payments for a while. It might or might not be a excellent thought, but see if you even have the option.
Also check out your budget and spending to see if there are any other places you can cut costs (even temporarily) so you can place a small more toward getting out of debt. I like mint.com because it makes it simpler for me to track spending – it’s a free budgeting website that links to your online accounts. There are other products like Quicken you can buy that do more.
Some experts say start with the lowest balance debt, some say start with highest interest. One thing the experts agree on is targeting debt, which means prioritizing debts, paying the minimum payment to all except #1 on your list and putting all additional payments to #1. Once that account is paid off, take what you were paying to it and place it toward #2. By paying a small extra on multiple accounts, it seems like you’re never really making progress and will take longer to get rid of one of those minimum monthly payments. Below is a link to an excel template available for free download where you can test out different scenarios as to which debt to pay first, second, etc. and see how it changes the total paid and the payoff dates.
Honey, I got married at 19…WORST mistake of my life!
As a 49 yr ancient looking back- and having raised 3 kids who are older than you- I can honestly say that nobody becomes fully themself until around age 25.
Get engaged, if you like, but in the next 5 years you will change SO MUCH that you will be glad you waited. PLEASE take this advice…what is the huge rush? Right like is willing to wait- passion and lust need to rush.
you know why we have so many divorce?
is because people are not mature enough to get married
moral
there is not an apt age because is all about maturity
When my husband and I got married we were both 22. People who knew us, even casually, didn’t even bat an eyelash that we were young. They knew us and our characters enough to know that youth wasn’t too much of a factor or problem. We did get comments on how quick we got married and even then I acknowledged that it was quick. (4 months) What most people didn’t know though was that given both of our family histories this was really a very common courtship time frame.
Marriage is such an personal thing. Yes, statistics are there that speak against young marriage but not everyone fits into a cookie cutter. In the end, if you honestly reckon and feel you are making a reasonable and rational choice by marrying young then go ahead.
You will both change a TON through your twenties as you mature into adults. These changes add a huge extra stress on young married couples. If you wait until at least 25 (or more is better) it will make it simpler. If it’s meant to last it will and if it doesn’t last just because you did not get married at age 21/22 then you dodged a divorce.
WOW… the foundation is well customary! You have all the tools. You both have jobs.
You have had a trial run (lived together) and been together for a year. This is not an
impulse; knee jerk choice.I would say place this boat in the water and raise the main sail !
I wish you the very best,
Colie
My wife was 20 when we got married. I had just turned 22. We had $ 700 in our pocket, an ancient car her folks gave to us and an admissions slip to college. No job. No place to live. And the college was 2000 miles from either of our parents. We were high school sweethearts (even though we went to different high schools). My wife was 16 and I was 17 nearly 18 when we met and started going together. We got married, honeymooned and then drove across country to go to college. We had no clue we were too young or couldn’t make it in the world. We only knew that we were together and willing to face life as a couple. We have been together for 35 years, 2 kids, and 6 grand-kids and still loving life together. I’d rather spend time with her than any one or anything else. We have fantastic vacations together. I married my best friend. I married an angel and she is the most gorgeous woman in the world to me. My kids reckon I’m very sappy…but I don’t care. I adore my wife. She says I spoil her. Don’t know how….all I do is just like her.
After your comments I was trying to figure out why you are waiting til 2012 to get married? You both sound ready to me. There is no “too young” age, it’s your level of maturity and commitment to each other in spite of what life has to through at you. If either of you do not have the maturity or that level of commitment, or if either is very selfish, then you are not ready. But if you are, than why wait?