Debt Dumpers 2020

[DisneyMandC]

Though you would not know it today with all the house sales and refy's everyone is doing. Hubby works for a mortgage company and they are so swamped with loan applications. THey have did 10 billion dollars in loans in 1 month when their rate dipped to 1.89% They have plans to hire 10,000 more people this year to keep up on demand. Niece is a realtor she has more customers than she has houses because as soon as the hit the market the are sold.

Yup, and auto sales. DH works in the auto industry and they literally can't get enough cars in to sell to people. I don't doubt at all that there are people out there hurting, but it's also crazy to me how much some people are spending.

I put an extra $100 payment to DH's student loan last month, and an extra $500 this month. Last month was 3 paycheck month, so I'm just going to pay an extra $500 on it for the rest of the year until it's paid off. I'm just so tired of paying that loan!

In other news, it looks like I'll resume paying my student loan in October. While the forbearance is extended under the new exec order, it did NOT extend the PSLF portion of it. So even though I don't have to make any payments in October-December, those three months wouldn't count towards my PSLF, so it's not worth it. I'm thankful for the 6 months I got.

 

[DLgal]

Though you would not know it today with all the house sales and refy's everyone is doing. Hubby works for a mortgage company and they are so swamped with loan applications. THey have did 10 billion dollars in loans in 1 month when their rate dipped to 1.89% They have plans to hire 10,000 more people this year to keep up on demand. Niece is a realtor she has more customers than she has houses because as soon as the hit the market the are sold.

Yes, but this is only due to the rate decrease by the Fed. If they hadn't intervened, you wouldn't be seeing this level of activity.

Also, in a few months, once loan/mortgage forbearance ends, there will be a sudden surge of mortgages in default, erasing all the gains these banks have made with new mortgages and refinances.

 

[RamblingMad]

Yup, and auto sales. DH works in the auto industry and they literally can't get enough cars in to sell to people. I don't doubt at all that there are people out there hurting, but it's also crazy to me how much some people are spending.

I put an extra $100 payment to DH's student loan last month, and an extra $500 this month. Last month was 3 paycheck month, so I'm just going to pay an extra $500 on it for the rest of the year until it's paid off. I'm just so tired of paying that loan!

In other news, it looks like I'll resume paying my student loan in October. While the forbearance is extended under the new exec order, it did NOT extend the PSLF portion of it. So even though I don't have to make any payments in October-December, those three months wouldn't count towards my PSLF, so it's not worth it. I'm thankful for the 6 months I got.

The executive orders are likely to be challenged in court. Congress doesn't resume until next month. Lots of uncertainty.

 

[FQLover]

109?? Holy, moly! Take care of yourself. Lots of iced drinks for you and get into that pool!

I, too, have been saving money as much as possible, rather than paying things off. I have about 2K with 0% interest left on my central AC loan. And I have about 4500 left on my car loan, but I just keep funding my many savings accounts on Cap One 360 and my savings account (emergency fund) in my main bank, rather than paying them off early. A paid off car isn't going to help me pay the mortgage or buy food, I figure, if things go south. And I know that there are other ways to run the numbers, but this feels the most comfortable for me.

With no travel and no typical summer fun, I have been spending very little--other than more on groceries and some takeout. There was a chance I was going to have a large pay cut in my salary this month (17%) but it didn't happen, thank goodness. It could happen in January still, but in the meantime, I am plugging money into those savings accounts. I was very sad to miss our planned for Florida vacation and a few smaller weekend trips this summer, but hopefully, next summer will be a safer time for travel and trips to see family and friends who live in other states.

 

[FQLover]

Duh! Until I read DisneyMandC's post just now, I completely forgot a huge item I bought in May (smacking my forhead)! I bought my DD19 her first car--which was a promise I made last year. Even so, I bought very frugally, but a good used car with only 70K miles and one meticulous owner. I didn't put as much down as I planned to because of the pandemic. I also financed for 5 years so that the payment was low. I am going to pay for three years, and when she is out of college, she is going to pay the last two years.

But that payment and the very big increase in my monthly car insurance payment still allowed me to save quite a bit because of the lack of spending anywhere else. When she returns to college this week, my grocery bill will go down sort of automatically. I am back to teaching in person this week so no more noshing at home around the clock while working remotely, haha.

 

[ruadisneyfan2]

Ally APY is dropping down to 0.80% in savings accounts.

Varo is still 2.8% for the first $10k!
For now...

 

[ruadisneyfan2]

New to this group, but so excited because we just paid off our ridiculously expensive truck. We never should have gotten it, I know, but I've done all I can since I've learned, to get it paid off. It's very exciting for me and I'm so proud of us!

Chalk it up as another lesson in life. Sometimes we only learn the hard way.

 

[ruadisneyfan2]

The general advice from smart financial types right now is DO NOT sink extra money into your mortgage. The idea is that the equity in your house can't be tapped in an emergency like liquid cash can be. Also, many lenders are stopping Home Equity lines of credit at this time so you can't count on that. Hoard cash. It's what they are all recommending people do to weather this uncertain time.

While this makes sense, our jobs are very secure. Of course no job is 100% safe but our hospital and department are busy AF. We are growing and expanding still. I'm back to coming home drop dead exhausted. (How I long for early June with forced 60% our old volume.) We recently had a very popular breast surgeon return to us after being at another facility for around 10 years. Due to some contract details related to jumping ship and taking a job with the competition, she is unable to actually perform surgeries with us for 1 year. She has a huge following and we expect to be extremely busy next year. We are also in the process of starting a mobile mammography unit in the next 6 months so we'll be hiring eventually to replace the techs that accept that assignment.

Dh works at our county water treatment plant. That is also very secure. People keep on flushing, showering, doing laundry... He came there from a private contractor that was often hired because the county's in-house maintenance crew was not very skilled, experienced nor knowledgeable. (This is what happens when people get jobs due to who you know, instead of what you know. If you know how to push a lawn mower but your mom is mayor of a local town, that qualifies you to be a "mechanic". It's pathetic.)

When dh joined the crew, mostly for the good benefits package, 3 of his coworkers from his old job joined him in the move. Those 4 have been the main mechanics that can actually get things repaired and do it promptly. They finish jobs in a day or 2 that when given to the other "mechanics" they flounder for weeks, months, sometimes just abandon it. But I digress. Two of those highly skilled mechanics have recently retired and another is soon to retire. Dh is worried that all of the more difficult work will eventually be on his shoulders and they'll give him a couple clueless laborers to "help". Also he is 62 and worries that there's no way the younger team can do the type of jobs that they are currently able to get done and they have no desire to learn. So while not quite as secure as your dh's job, he is very much needed at his job. He is working more OT this weekend.

Even if paying off a mortgage doesn't make sense to other people, I need to have it gone. I'm 53 and I've had a mortgage since I was 26. (Not just on our current home but including the one before this one.) I've never had a late payment but I'm over it. If it weren't for the stupid choices we made which led me to joining this thread, it would have been paid off by the time ds23 was finishing HS. No way in hello are we carrying that through to dh's retirement. If we should ever get to the point where we're jobless, broke, exhausted our emergency fund, no unemployment insurance left, well then we can still tap our retirement funds. That would be a last resort of course.

People all have different financial aspects that stress them. For me right now, it's having a mortgage. Also once it's gone, it will free up an additional $1300/month to add to our retirement funds, get BR furniture, travel, etc. It also opens the possibility for the first time that we could afford for me to work part-time. I think that would be ideal.

Here is a great calculator that shows how much interest you can save by paying extra on the principal. For us, it will shave it down from 8 years remaining to 2 +/- and save over $10k in interest. We're in the home stretch with our eyes on the finish line.
https://www.free-online-calculator-use.com/extra-payment-mortgage-calculator.html
I'm back in that mode where I look at every purchase as want vs. need and only buy what we really need.

 

[DisneyMandC]

The executive orders are likely to be challenged in court. Congress doesn't resume until next month. Lots of uncertainty.

Yeah, I do think there’s a chance it’ll change, but I’m not banking on it. I’ve been “paying” my student loan payment into savings every month anyways, so I haven’t changed my budget at all since it was put into forbearance. I’m ready to go back to paying it if need be.

 

[StacyStrong]

I have a student loan WWYD question for you all.

As I mentioned previously, I have been putting my typical monthly student loan payment in a savings account due to the Federal Forbearance/No Interest. At the end of the forbearance period, my plan was to just put all that money I've put aside to the principal of the loan.

However, I have a couple student loans that haven't been impacted by the forbearance. Once is a Perkins loan from law school. I am about halfway through a 10 year payment plan with about $2k left on the loan. Interest rate is 5%. I've been just paying that monthly.

BUT, I have already put aside double that amount from my normal fed student loan payment that's on forbearance. I'm debating just taking that cash and knocking out the Perkins loan in its entirety. Is that a bad idea? I mean realistically I'll be saving that interest I would be paying over 5 years, but it's a small loan so it's not THAT big of a savings. I don't see a down side though. Am I not thinking of something.

For reference, student loans are my only debt, I have a funded emergency fund, exceed my employer match in 401k contributions, have been putting additional money aside every month (in long term savings, vacation, christmas, car repair, and law license funds), and my job is relatively (as much as it can be) secure.

WWYD? Use a portion of the forbearance money to fully pay off another student loan? Leave it?

 

[DisneyMandC]

I have a student loan WWYD question for you all.

As I mentioned previously, I have been putting my typical monthly student loan payment in a savings account due to the Federal Forbearance/No Interest. At the end of the forbearance period, my plan was to just put all that money I've put aside to the principal of the loan.

However, I have a couple student loans that haven't been impacted by the forbearance. Once is a Perkins loan from law school. I am about halfway through a 10 year payment plan with about $2k left on the loan. Interest rate is 5%. I've been just paying that monthly.

BUT, I have already put aside double that amount from my normal fed student loan payment that's on forbearance. I'm debating just taking that cash and knocking out the Perkins loan in its entirety. Is that a bad idea? I mean realistically I'll be saving that interest I would be paying over 5 years, but it's a small loan so it's not THAT big of a savings. I don't see a down side though. Am I not thinking of something.

For reference, student loans are my only debt, I have a funded emergency fund, exceed my employer match in 401k contributions, have been putting additional money aside every month *in long term savings, vacation, christmas, car repair, and law license funds), and my job is relatively (as much as it can be) secure.

WWYD? Use a portion of the forbearance money to fully pay off another student loan? Leave it?

You're not on PSLF right? If all your other loans are over 5%, you could put it towards your smallest (dollar amount) loan to try to pay it down faster and it would be more of a savings in the long run. But I do totally get the benefit of paying that Perkins loan off from a mental standpoint. I paid mine off since it's not eligible for PSLF too.

 

[StacyStrong]

You're not on PSLF right? If all your other loans are over 5%, you could put it towards your smallest (dollar amount) loan to try to pay it down faster and it would be more of a savings in the long run. But I do totally get the benefit of paying that Perkins loan off from a mental standpoint. I paid mine off since it's not eligible for PSLF too.

Nope, not PSLF. My others are above 5%, but just mentally it would be so nice to have it gone so I'm not paying 3 providers every month. You're right that it would save me more in the long run to apply to those higher interest rates, but with the forbearance continuing through December (allegedly), I'll still be able to knock down the $$ amount on some of those other loans as well.

I think I might just bite the bullet and do it to have them gone.

 

[afan]

Nope, not PSLF. My others are above 5%, but just mentally it would be so nice to have it gone so I'm not paying 3 providers every month. You're right that it would save me more in the long run to apply to those higher interest rates, but with the forbearance continuing through December (allegedly), I'll still be able to knock down the $$ amount on some of those other loans as well.

I think I might just bite the bullet and do it to have them gone.

I'd pay it off just to make it easier. Then throw that payment as one of the other two or split it. You'll feel better having it gone.

 

[StacyStrong]

It turns out one of the other loans (which I can still cover with the savings I have put aside) is not owned by the Dept of Ed so it also isn't part of the forbearance. It's on an IBR plan, so the monthly amount is super low (since it's a small loan). But, the interest rate is 6.5% versus 5%, so I think I'm going to knock that one out instead. I don't have trouble paying the other, slightly higher, monthly payment that isn't on IBR, so seems like a good option.

Thank you!

 

[RamblingMad]

It turns out one of the other loans (which I can still cover with the savings I have put aside) is not owned by the Dept of Ed so it also isn't part of the forbearance. It's on an IBR plan, so the monthly amount is super low (since it's a small loan). But, the interest rate is 6.5% versus 5%, so I think I'm going to knock that one out instead. I don't have trouble paying the other, slightly higher, monthly payment that isn't on IBR, so seems like a good option.

Thank you!

Your savings isn’t paying anything close to those rates, so unless you invest in more risky assets, I don’t see why you carry the debt. Do you have an emergency fund fully funded?

 

[StacyStrong]

Your savings isn’t paying anything close to those rates, so unless you invest in more risky assets, I don’t see why you carry the debt. Do you have an emergency fund fully funded?

Yes, I do have a funded emergency fund.

I was carrying the debt because before the forbearance, I could not afford to pay the debt off.

Now, the payment is processing. It’s my first time being able to make this kind of payment, which is why I asked the question to make sure I wasn’t missing a down side.

 

[RamblingMad]

Yes, I do have a funded emergency fund.

I was carrying the debt because before the forbearance, I could not afford to pay the debt off.

Now, the payment is processing. It’s my first time being able to make this kind of payment, which is why I asked the question to make sure I wasn’t missing a down side.

The down side is not having a sufficient emergency fund. I doubled my fund post COVID. It’s closer to a year than 6 months now.

What you pay down in what order is a personal choice.

 

[crazycatstacy]

Still plugging along here. It seems that whenever I think we will make progress something comes up but at least the unexpected events are cash and not card. I really want to buy the Disney Halloween dishes from Pottery Barn Kids. Looking at $164 for what I want. I have that much I have earned from some crafts I have made but I feel guilty and feel like I should put the money towards debt. Thoughts?

 

[RamblingMad]

Still plugging along here. It seems that whenever I think we will make progress something comes up but at least the unexpected events are cash and not card. I really want to buy the Disney Halloween dishes from Pottery Barn Kids. Looking at $164 for what I want. I have that much I have earned from some crafts I have made but I feel guilty and feel like I should put the money towards debt. Thoughts?

Halloween dishes? Are you expecting to have a Halloween party this year?

 

[imbatman]

Still plugging along here. It seems that whenever I think we will make progress something comes up but at least the unexpected events are cash and not card. I really want to buy the Disney Halloween dishes from Pottery Barn Kids. Looking at $164 for what I want. I have that much I have earned from some crafts I have made but I feel guilty and feel like I should put the money towards debt. Thoughts?

Halloween dishes? Are you expecting to have a Halloween party this year?

Sometimes, there are purchases for joy. If your craft earning don't play into your budget, you can buy them without guilt! It DOESN'T MATTER if you're having a party or not. I bought some pressed pennies on Ebay last week for $16 for the joy of the memories. I kinda chewed myself up before I bought it, but now I'm so excited to see the package tracking closer!

Is $164 too much? That's something you'll have to decide. But if you don't incur new debt and it doesn't impact your budget, I kinda hope you allow yourself some fun. You'll love them every time you unpack them.