Hello Again World Wide Web!
I have tallied up my expenses for this first quarter and boy have I come out of my economic slump! Now it is time to refocus and readdress the financial beating unemployment took.
Here's the damage:
Credit Card 1 - $1600 - 12%
Credit Card 2 - $6000 - 11%
Student Loans - $26400 - 6.8 to 2.3%
Total - $34000 Yikes!
(Yes, that is how much in debt I am!)
Solution:
The stack method of debt repayment looks to be the fastest and least costly in the amount of interest paid.
How does it work?
Start with paying all minimum payments. Any extra money you can spare you put solely toward the loan with the highest interest. When you have paid off that first loan, the minimum that you paid toward that loan, plus any extra, goes to the next highest interest rate loan. Still paying all the minimums. So the third highest interest rate loan will (eventually) be paid with the minimum interest of that loan, plus whatever the minimum amount of the first and second loans were AND the extra, spare money. Continue this process until all loans are payed off...or you win the lottery!
My minimum payments are around $420. If I could swing 50 extra dollars per month, it would take me 7.5 years! (Ugh, I will be 40 and living at home.) Interestingly, $100 more per month only relieves 10 months of payment, taking 6 years and 7 months to pay off all the loans. To get anywhere near 5 years, I would need to pay $200 on top of the minimum $420.
Looking at my expenses, and still being on a part-time salary with part-time hobby, I think I could swing this and still start rebuilding my retirement and emergency funds. I really don't get out now, like for theater movies and such, nor do I have the time, so maybe I will try this for the next three months. Wish me luck!
Others plans in the weeks to come...
Enjoying Bourbon Street Vanilla Rooibos nearly every night!
I have tallied up my expenses for this first quarter and boy have I come out of my economic slump! Now it is time to refocus and readdress the financial beating unemployment took.
Here's the damage:
Credit Card 1 - $1600 - 12%
Credit Card 2 - $6000 - 11%
Student Loans - $26400 - 6.8 to 2.3%
Total - $34000 Yikes!
(Yes, that is how much in debt I am!)
Solution:
The stack method of debt repayment looks to be the fastest and least costly in the amount of interest paid.
How does it work?
Start with paying all minimum payments. Any extra money you can spare you put solely toward the loan with the highest interest. When you have paid off that first loan, the minimum that you paid toward that loan, plus any extra, goes to the next highest interest rate loan. Still paying all the minimums. So the third highest interest rate loan will (eventually) be paid with the minimum interest of that loan, plus whatever the minimum amount of the first and second loans were AND the extra, spare money. Continue this process until all loans are payed off...or you win the lottery!
My minimum payments are around $420. If I could swing 50 extra dollars per month, it would take me 7.5 years! (Ugh, I will be 40 and living at home.) Interestingly, $100 more per month only relieves 10 months of payment, taking 6 years and 7 months to pay off all the loans. To get anywhere near 5 years, I would need to pay $200 on top of the minimum $420.
Looking at my expenses, and still being on a part-time salary with part-time hobby, I think I could swing this and still start rebuilding my retirement and emergency funds. I really don't get out now, like for theater movies and such, nor do I have the time, so maybe I will try this for the next three months. Wish me luck!
Others plans in the weeks to come...
Enjoying Bourbon Street Vanilla Rooibos nearly every night!
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