Debt Dumpers - 2019

[Birdie dog]

Question to the debt dumpers. If you have a 0% APR on a car loan, is there any reason (besides getting it paid off) to pay it early? Quite frankly, I want my CC debt gone before I even consider it, but it seems like paying extra money towards it isn't the best use of cash right now.

 

[Happy814]

Question to the debt dumpers. If you have a 0% APR on a car loan, is there any reason (besides getting it paid off) to pay it early? Quite frankly, I want my CC debt gone before I even consider it, but it seems like paying extra money towards it isn't the best use of cash right now.

No. Let that loan ride and put your cash somewhere where it works harder for you. The only way I could possibly see it is if you're upside down on it, but then GAP insurance would kick in.

 

[ruadisneyfan2]

Question to the debt dumpers. If you have a 0% APR on a car loan, is there any reason (besides getting it paid off) to pay it early? Quite frankly, I want my CC debt gone before I even consider it, but it seems like paying extra money towards it isn't the best use of cash right now.

I would still pay it off early but only after all other debt is paid off. Well actually, that would depend how much time you have left on the car loan. If it had 6 months remaining and payments are $500/month, freeing up that money would give a huge boost to your snowball.

If it still has 3 years remaining, I'd aim for all other debts first.

jmho

 

[ruadisneyfan2]

DH and I have decided on a 5 day trip to Jamaica for our 15 year anniversary. It is not a budget trip in the slightest as we went with a high end, all inclusive, adults only resort but we are not going in to debt for it and decided we ain’t getting any younger for these types of things. We have the added, but necessary, expense of passports that we’ve never gotten. We booked the trip 5 days ago, but it’s still sitting in pending on my cc account. We haven’t been contacted by them to confirm we made the charge but I’m starting to worry it’s been stopped by them due to being an unusual transaction. I will probably call them if it doesn’t clear in the next couple of days. I have the money sitting here ready to pay it off.

We will probably change up our family vacation plans to something simpler than California and save that for next year. Our son enjoys history and water parks (what a combination). Any thoughts on where we might go to incorporate both of those things?

Another vote for Williamsburg and Water Country USA. It's been a few years for us but we've been there twice. Both times, they had a AAA special for a 7-day combo ticket for around $70. So cheap and doesn't have to be 7 consecutive days. Both times there were some crazy hot days and Hubba Hubba Highway was just what we needed.
Also Virginia Beach is just under a 1 hour drive so we'd always spend one day there as well.

Another history option nearby is Ft. Eustis Military Transportation Museum. It sounds utterly boring but I was outvoted and made the best of it. It was really much more interesting than I expected. An inexpensive way to kill a couple hours.
http://www.transportation.army.mil/museum/


I also have a son who loves history. A lot of our travel plans incorporate history for his sake and many times the things that he requests end up being the highlight of our trip. This won't be the case with Ft. Eustis but definitely was when we went to Paris and he asked if we had time to visit Normandy/Omaha Beach.

 

[jen7233]

Question to the debt dumpers. If you have a 0% APR on a car loan, is there any reason (besides getting it paid off) to pay it early? Quite frankly, I want my CC debt gone before I even consider it, but it seems like paying extra money towards it isn't the best use of cash right now.

I can't see any reason other than wanting to just be done with the loan of course, and not have it hanging over you or seeing it come out every month. If it's a choice between paying cards first or the car loan, at that %, I'd choose the cards. But then, are those on any 0% balance transfers? If so, would look at what has the smallest balance and pay that down first.

 

[ruadisneyfan2]

I have been reading this thread for a long time. Time for a question.

If you have two cards with similar balances that you want to pay off, do you pay minimum on one and a extra on the other. Or do you pay extra on both?

Example:

Card A: $2,000 balance: Payments: $500, $500, $500, $500
Card B: $2,000 balance: Payments: $35, $35, $35, $35, $500, $500, $500, $400

or

Card A: $250,$250,$250,$250,$250,$250,$250,$250
Card B: $250,$250,$250,$250,$250,$250,$250,$250

I like the idea of focusing on one card at a time. Which is what I have been doing. What are your thoughts?

I followed the Dave Ramsey Snowball method which is to choose the smallest balance and attack it with all you can, while paying minimum on all other debts. In the past I tried paying a little extra to various bills here and there with no rhyme or reason and felt like I was getting no where. I don't agree with all of DR's advice but the snowball method worked fabulously for us. I still use that mentality for saving for something large, even though I paid off debt. Still have mortgage.

If both cards have a similar balance, choose the one with the higher interest rate. If both interest rates are the same, I'd choose the one with the larger minimum payment so that when it's paid off, it will add more to the monthly snowball. Our monthly snowball started with $25 and ended with $2500. Never give up.

 

[barkley]

Question to the debt dumpers. If you have a 0% APR on a car loan, is there any reason (besides getting it paid off) to pay it early? Quite frankly, I want my CC debt gone before I even consider it, but it seems like paying extra money towards it isn't the best use of cash right now.

if you have other interest accruing debt i would throw any extra $$$ towards it UNLESS that zero % reverts to high rate before you pay it off.

if that is the case-run the numbers. see how much interest wise paying more on your cc debt saves vs paying off the car before an interest rate kicks in.

beyond that-i will share that we got LOTS of advise that we were crazy to do a heavily accelerated payoff on our mortgage given the low interest rate on it vs. saving and reaping 'traditional investment returns'. well.......................beyond the fact that in the last handful of years most people's 'traditional investment returns' have been low to negative-the relief of being totally out from under a large debt is beyond belief-and we've been able to take the monies we used to put towards debt and use them, invest them, do as we wish.

p.s. check w/your auto insurance carrier-the premium may decrease w/payoff for an additional savings.

 

[Jen and Ashwin]

I worked out the numbers and we should have about $800-$900 left from our extra paycheck after covering taxes and our overspending from the last two months. We have decided to put it towards the trailer loan.

Question to the debt dumpers. If you have a 0% APR on a car loan, is there any reason (besides getting it paid off) to pay it early? Quite frankly, I want my CC debt gone before I even consider it, but it seems like paying extra money towards it isn't the best use of cash right now.

I would say no. That is like getting free money because instead of paying it off sooner, you could invest that money and earn interest.

 

[Jen and Ashwin]

No. Let that loan ride and put your cash somewhere where it works harder for you. The only way I could possibly see it is if you're upside down on it, but then GAP insurance would kick in.

Not everyone carries gap insurance. We don't because it usually doesn't make sense for us. It increases the cost of insurance significantly and we usually put down enough on our cars to never be upside down.

 

[Tygerlilly]

Yay! This morning my tax refund status went from the generic "path act" message to "processing" again! Crossing my fingers for a miracle and maybe I'll get it this week.

 

[Ngwira]

I see our refund pending in my account. Yay!

 

[Happy814]

Not everyone carries gap insurance. We don't because it usually doesn't make sense for us. It increases the cost of insurance significantly and we usually put down enough on our cars to never be upside down.

Right, I was mentioning that it is something to consider. If you were upside or close to it, hopefully you would have GAP insurance. Obviously if you put enough cash down/traded in high enough you can skip GAP and ride out a 0% loan because you have the security of knowing that in an accident you won't owe to pay the loan off if the car is totaled.

 

[ruadisneyfan2]

Looking for opinions here, just for some ideas/feedback. Going forward, we're going to divvy out extra income each month on a percentage basis. We've identified 4 main goals/categories at this time:

• House Savings (down payment, moving costs, furniture, etc) - currently at $17,500
• Extra Payments on Car Loan - currently $30k at 3.8%, $550 payment, 6 years left
• Emergency Fund - currently at $2350
• Travel Fund

Currently we are living with my in-laws, and the car loan is our only debt. The general idea is that we would keep saving towards a house but pay down the car loan either until it's gone or refinance it so the payment/interest is lower. We do plan to maintain some flexibility in that if we decide that we're within $XXXX of paying the loan off, we might pull it from other funds if we want. Travel will come out of OT/Commission pay (where most extra income is from). Currently we aren't contributing to the Emergency fund; I just add any bank account interest to it each month.

So here's my question, and where I'm torn. How hard would you contribute to the Emergency fund? Obviously if we turned around and bought a house tomorrow we would not be happy with $2300, but I don't know that I want to divert a large chunk of money to it and say, not pay off the car loan when our expenses are so low.

ETA ridiculous car loan

jmho, I'd be attacking that huge car loan. 550 x72=39,600 That's a lot of interest you could cut by paying early. That will be MUUUCH easier to do while living with family with no mortgage.

Extra paychecks and windfalls aside, how much per month do have typically have to pay down debt/save?

 

[Shughart]

Question to the debt dumpers. If you have a 0% APR on a car loan, is there any reason (besides getting it paid off) to pay it early? Quite frankly, I want my CC debt gone before I even consider it, but it seems like paying extra money towards it isn't the best use of cash right now.

If I was close to the end, say a year or less left on the life of the loan and I could conceivably free up that payment for other line items in my budget SOON, I would probably be tempted to throw more money at it. If you have 2+ years left on the loan, I would get rid of the credit card debt AS LONG AS you are not going to run it back up.

 

[amalone1013]

jmho, I'd be attacking that huge car loan. 550 x72=39,600 That's a lot of interest you could cut by paying early. That will be MUUUCH easier to do while living with family with no mortgage.

Extra paychecks and windfalls aside, how much per month do have typically have to pay down debt/save?

Yes, it's ridiculous

We currently have at least $1000, that is on top of the regular payment.

Though... the only time I've had a "normal" check at my job is when I'm on vacation. I typically have at least 4-5 hrs due to meetings and finishing up work stuff, then it goes up with working some weekends and covering when people are on vacation.

 

[jen7233]

Looking for opinions here, just for some ideas/feedback. Going forward, we're going to divvy out extra income each month on a percentage basis. We've identified 4 main goals/categories at this time:

• House Savings (down payment, moving costs, furniture, etc) - currently at $17,500
• Extra Payments on Car Loan - currently $30k at 3.8%, $550 payment, 6 years left
• Emergency Fund - currently at $2350
• Travel Fund

Currently we are living with my in-laws, and the car loan is our only debt. The general idea is that we would keep saving towards a house but pay down the car loan either until it's gone or refinance it so the payment/interest is lower. We do plan to maintain some flexibility in that if we decide that we're within $XXXX of paying the loan off, we might pull it from other funds if we want. Travel will come out of OT/Commission pay (where most extra income is from). Currently we aren't contributing to the Emergency fund; I just add any bank account interest to it each month.

So here's my question, and where I'm torn. How hard would you contribute to the Emergency fund? Obviously if we turned around and bought a house tomorrow we would not be happy with $2300, but I don't know that I want to divert a large chunk of money to it and say, not pay off the car loan when our expenses are so low.

ETA ridiculous car loan

I wouldn't contribute too hard to the emergency fund with those parameters. I'd probably still stick some away because I don't like the concept of not saving, and there are always emergencies, but yeah I'd probably be taking a double take at my car loan depending on what my window is to get into a new place and how much of the monthly income can be/is allocated into the house saving and emergency fund budget. Depending on that window, I may slide a bit from house savings and dump it on the car, the 3.8% isn't bad, but it could be better.

 

[Dentam]

I guess I should have knocked on a larger piece of wood when I said I was feeling optimistic about this year.

So, I got an email today that my landlord is raising my rent by $60/month. The rent is already above the market and Denver's rental market is already cooling off and is supposed to further this year. I also just saw an ad for a duplex one block away from me that is being offered for $175/month less than what I'm CURRENTLY paying. Not sure if they allow pets though and I would also have to break my current lease to get it which is not something I would be willing to do.

But wait, there's more. I took my dog to the vet for bloodwork to make sure she was fine for her dental exam, which they would need to put her under for. Her blood work showed an elevation in some kidney levels so they want me to switch her to a prescription diet. Double sigh.

So, that's where I am right now. Wish me luck in this rental situation. I really don't want to move again. I would love to buy something but all I can afford is a condo and with the rents the way they've been I haven't had any way to save up for a downpayment. Those of you who own, consider yourselves very lucky!!

ETA: Heard back from my landlord and we have compromised with a $25/month increase to my rent. I still think I'm overpaying, but the cost and hassle of moving again are enough to deter me from going that route. I really like my neighborhood and my neighbors also and just want to stay put for now. Glad she was willing to compromise!

 

[ruadisneyfan2]

Yes, it's ridiculous

We currently have at least $1000, that is on top of the regular payment.

Though... the only time I've had a "normal" check at my job is when I'm on vacation. I typically have at least 4-5 hrs due to meetings and finishing up work stuff, then it goes up with working some weekends and covering when people are on vacation.

So it would be feasible to kick that to the curb in approx 18 months, assuming nothing catastrophic happens such as major illness or job loss.

$30,000 /1550 per mo.=19.4 months and that doesn't include the extra weekends and covering others so it could actually be much shorter if you can really attack it, full ninja.
(not factoring interest, of course)

That would be my path. That car loan would be harder to deal if you carry it into a mortgage scenario. jmho. It would be better to eliminate so that when you do buy a home, zero car payments can hopefully allow some extra wiggle room for all the decorating/renovating/maintenance that comes with it.

again, jmho.

 

[AJollyHoliday]

I wanted to share our success story which really helped us out when Murphy came to visit. DH and I paid off over $70k in debt just before Thanksgiving! It took 13 months and felt amazing! We even paid off my 0% interest car before I had it 2 years. Starting in Nov, we were able to put a lot more to our emergency fund and start building up 3 months of expenses (we drank the Dave Ramsey kool-ade). Well, in Nov our dog partially tore her ACL, we started saving for the surgery. Then she partially tore the other ACL. We went to see the surgeon because she can barely walk and is only 5! She was a very peppy dog and playing with our puppy, but now she is so sad. The surgery is going to be $10k, but thanks to Dave Ramsey and our hard work, we can pay cash for it! If this happened last year, we would not have had the money and it would have been so stressful. Now we can focus on making her comfortable after the surgery. There's more...we did our taxes and we are those "unfortunate" earners who are getting hit hard with the tax reform. We owe about $6k in taxes!!! But once again, we have the money and with no debt, we will be able to build our emergency fund right back up. We are also more financially literate thanks to following Dave Ramsey and reading more about finance.

I just wanted to let everyone know that you can do it and we are happier than ever. We have little in the way of wants (except to go to Disney). We are happy with what we have and feel so empowered.

We head to Disney this Wednesday with about $925 in GCs that we paid about $300 for thanks to swagbucks and selling things and saving change. I am so excited!

 

[ruadisneyfan2]

I wanted to share our success story which really helped us out when Murphy came to visit. DH and I paid off over $70k in debt just before Thanksgiving! It took 13 months and felt amazing! We even paid off my 0% interest car before I had it 2 years. Starting in Nov, we were able to put a lot more to our emergency fund and start building up 3 months of expenses (we drank the Dave Ramsey kool-ade). Well, in Nov our dog partially tore her ACL, we started saving for the surgery. Then she partially tore the other ACL. We went to see the surgeon because she can barely walk and is only 5! She was a very peppy dog and playing with our puppy, but now she is so sad. The surgery is going to be $10k, but thanks to Dave Ramsey and our hard work, we can pay cash for it! If this happened last year, we would not have had the money and it would have been so stressful. Now we can focus on making her comfortable after the surgery. There's more...we did our taxes and we are those "unfortunate" earners who are getting hit hard with the tax reform. We owe about $6k in taxes!!! But once again, we have the money and with no debt, we will be able to build our emergency fund right back up. We are also more financially literate thanks to following Dave Ramsey and reading more about finance.

I just wanted to let everyone know that you can do it and we are happier than ever. We have little in the way of wants (except to go to Disney). We are happy with what we have and feel so empowered.

We head to Disney this Wednesday with about $925 in GCs that we paid about $300 for thanks to swagbucks and selling things and saving change. I am so excited!

Love it!!!
Have a wonderful trip!