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I never posted a June update, so here is the update from May to July.

9/05 5/07 7/07 rate
1) Car loan $11,567 - -
2) Chase MC $10,225 - -
3) AT&T MC#1 $ 5,163 - -
4) AT&T MC#2 $ 3,606 - -
5) Student1 $ 3,527 - -
6) Furniture - $4,629 -
7) Chase - $11,837 $11,369 0% through 2/08
8) Best Buy $ 1,173 $1,930 $1,890 0% through 9/09
---------------------------------------------------------------
Total $35,261 $18,396 $13,259 0% average

This month we paid off the furniture as planned - the 0% rate was set to expire at the end of the month. Between this and our trip to Europe in June (which was fantastic, btw), I will admit that we had to dip into savings a little bit.

DW just received a nice raise at work, which allowed us to raise her 401(k) contribution from 10% to 15% without reducing her take home pay. Since our snowball is working well, we agreed that it was better to take the long term view and increase the 401(k) contribution rather than have the extra monthly income to accelerate the snowball.

After slacking off for much of this year, DW and I have agreed to rededicate ourselves to eliminating our remaining debt. For August and going forward, our goal is to semd $2k monthly to the Chase card, plus any addition windfalls that come our way. We'll need to do this to have any chance of paying it off before the 0% rate expires in February.

Another budget evaluation is also in the works. We're going to stick with our reduced personal discretionary spending (which we did to help pay for our trip) until we finish our paydown. Our household spending ($200/wk for groceries, Target/Costco, dining out, entertainment, etc.) hasn't worked very well, so we're going to take another look at that.

And, in a MAJOR breakthrough, DW just asked me if we could snowball her car loan once we finish with these (currently ~$15k, 1.9%, $534/mo). Historically, DW has been fairly hands-off when it came to the household balance sheet, so this is a welcome change.
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Nice Job! I like how you finished up and DW wants to snowball the car loan. That is great news! After you pay off the car, make sure you keep it in running shape. I have never had a car loan and always bought cars that were coming off of 3-year leases. I am 28 and I have only had 2 cars. My 1999 Jeep Grand Cherokee with 141,000 miles is in great running shape and will probably be good for another 141k.
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Great job on the debt paydown. I would suggest that you can do better by saving the extra snowball money instead of giving it to the finance company holding your car loan. If you're only paying 1.9% interest, you can get at least 5% by depositing it at Emigrant Direct or any of a number of other companies. No sense giving them the money sooner if they'll let you make more on it than you're paying. Student loans often fall in that category too, depending on what rate you got.

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I would suggest that you can do better by saving the extra snowball money instead of giving it to the finance company holding your car loan. If you're only paying 1.9% interest, you can get at least 5% by depositing it at Emigrant Direct or any of a number of other companies. No sense giving them the money sooner if they'll let you make more on it than you're paying

This is what I would tend to think as well... take whatever extra you were planning to use to snowball the car loan and put it in the bank (Etrade, ING, Emmigrant).

This is what I've been doing on my car loan, 48-mo @ 2.9%, I've always been able to get higher then 2.9% return from CDs/high-yield savings, so I've seen no reason to pay off the car earlier. I'm past the point where the extra money I would have put toward the loan is higher then amount I still owe, the difference (interest I receive vs. pay) is approx. +$10/mo gross, which isn't much, but I won't turn it away...

Though I have to admit there is a huge amount of temptation to just pay it off to get it off my mind... for some reason it's harder for me to face repair bills or high regular maintenance costs when I am still making a payment :^)
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I would suggest that you can do better by saving the extra snowball money instead of giving it to the finance company holding your car loan. If you're only paying 1.9% interest, you can get at least 5% by depositing it at Emigrant Direct or any of a number of other companies. No sense giving them the money sooner if they'll let you make more on it than you're paying.

This can be true, but there are some other things that should also be considered for vehicle loans: 5% after federal taxes is generally 3.75% or less, depending on your tax bracket. Your net savings, after taxes and interest on the car loan is 1.85%. If your balance is $20k, that will be a net of $370 over the course of a year.

If you can save more than $370 in a year by either dropping comprehensive and collision completely, or by raising your deductible from, say $250 (what my last car loan required) to $1000, then you would come out ahead in a year by paying off the loan early, rather than keeping the money in your savings account.

AJ
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there are some other things that should also be considered for vehicle loans: 5% after federal taxes is generally 3.75% or less

AJ-- are you saying that the interest on car loans is tax-deductible? I thought that only applied to the interest on home mortgages.
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AJ-- are you saying that the interest on car loans is tax-deductible? I thought that only applied to the interest on home mortgages.

No, but the interest that you get from Emigrant, ING, etc. is taxable. So your after tax return on the savings is generally 3.75% or less.

AJ
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Thanks for the clarification, AJ.
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5% after federal taxes is generally 3.75% or less, depending on your tax bracket. Your net savings, after taxes and interest on the car loan is 1.85%. If your balance is $20k, that will be a net of $370 over the course of a year.

Exactly what I was thinking. We're solidly in the 28% bracket, so our ING account (more like 4.5%) returns about 3.24% after tax. That gives a 1.34% net profit, or $201 annually on $15k.

To me, clearing the burden of a $534/month car payment is more valuable than earning a small amount of interest. To justify keeping the loan, I would want a bigger rate spread.
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there are some other things that should also be considered for vehicle loans

i'd rather have the thing than the debt, for sure.

if something happens and i can't pay the debt, i could lose the thing - perhaps at a time when i need the thing more than ever.

BklynBorn
only 5 months away from owning free & clear the thing i've been driving for almost 5 years!
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i'd rather have the thing than the debt, for sure.

if something happens and i can't pay the debt, i could lose the thing - perhaps at a time when i need the thing more than ever.


But if you are truly saving the extra money you'd be putting toward the loan then this danger does not actually exist because you could always make an immediate lump sum payment that would either close your loan out (in my case) or bring you awfully close to whatever level you would have been at before by snowballing the loan.

That said, I usually never mess around with situations that could result in loss of my thing :^)
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I am somewhat surprised that fools are willing to post their Credit Card balances on this board - an open, non-secure site.

My CC balances are $24,945.12. Oh, wait, no - they're $127,984.97. Or perhaps they're $3,412.00.

Also, I am 26 years old, a natural redhead, and weigh 110 pounds (one of the many reasons I love the internet ;-)).

Kahuna, I know in some way you can't help it; but randomness like this is just...puzzling.

-lizmonster
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please don't feed the troll.

bb
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I am somewhat surprised that fools are willing to post their Credit Card balances on this board - an open, non-secure site.

OK, I will post my Credit card balance. CC balance = $0. I have six or seven credit cards.

Kahuna,CFA


As if you haven't posted enough personal details about yourself and your daughter the lawyer for you both to be easily stalked on the internet?

concordiadiscors
expects no reply


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i'm starting to think neither kahuna nor his daughter actually exist. how do we know?? they could just be the figments of someone's twisted imagination.

have you ever seen kahuna and seattle pioneer in the same place at the same time? well??

i rest my case.

8-)

BklynBorn
no offense, i hope, sp...
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Kahuna,CFA actually does exist. Here is a photo taken of me and one of my best friend's (He was my roomate in the Fall of 1962 - 20 Botkin House, Tripp hall) wife, Tuula at the University of Wisconsin, Madison Student Union in June 1997. My wife took the photo. The "Cheesehead" was a Father's Day Gift from my son who was also there, but not pictured.

Photo: http://www.themotleyfools.com/KahunaCFA.php


I must say KahunaCFA - you look almost exactly how I pictured.

Now Dave, what a hunk he is!!!!!!!!

(if he really looked like that, I would be flying to WA for my home loan)
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