I just discovered MMM about a week ago, and I've been diving in full force to try and come up with a plan for my current situation. Doing the math for my current debt situation, I'm trying to come up with a plan for hammering down my debt once and for all so I can start saving. One thing I'm struggling with is how to calculate payoff times with multiple debt sources. I'll provide some information to give context to what I mean. Apologies in advance for the longer post, but I figure having more information is helpful for my question.
Debt Sources:- Bank Loan (8.74%)- Balance of about $1,900 that will be paid off this month thanks to a tax return
- Credit Card (0% - did a free balance transfer) - Balance of $5,500. The transfer allowed me to have 0% interest (instead of the ~19% I had previously) until the end of this year, so I'm paying $550/mo and it will be gone in December
- Student Loans - (4.37%) - Balance of $46,500
- Mortgage (4.125%) - Balance of $211,400. I also have a PMI payment of $147.50/mo on this balance
I've determined at this point that it makes the most sense to tackle this in this order: 1) Wiping out the bank loan, 2) Leaving the $550/mo Credit Card payments to wipe it out by December, 3) Use the money that was going to the bank loan (and credit card when that's paid off) toward my mortgage to get rid of PMI ASAP, 4) Pay off my student loans when PMI is gone, 5) Finally, start putting more towards my mortgage while I save.
If I go by the original home value, I need to pay another $37,400 on my mortgage to remove PMI, but according to Zillow (not very reliable, I know), my house has gone up in value pretty significantly in the short time I've owned it, so I'm hoping I may be able to remove the PMI even quicker.
First QuestionNow for the question. What I'm struggling to calculate is the timeline for all of these goals. My use case has my payments to the various debts changing constantly as things are paid off. After this month the Bank Loan will be gone, and I'll be able to apply the ~$700/mo I've been throwing at it to my mortgage. In January of 2020, my credit card debt will be gone, and I'll be able to add another $550/mo to that payment. Given that I'm having trouble figuring out when I'll be able to remove PMI and apply that $1250/mo (plus the $147.50 from PMI) toward my Student Loans to calculate THAT payoff schedule...as you can see it gets pretty confusing. Is there an easy way to calculate this so I can get a timeline estimate for getting out of this debt?
Second QuestionThis one is a different question entirely, but I feel it is related, as it may be able to allow me to save more each month (and therefore pay down my debt faster). I am currently leasing a 2017 Toyota Corolla for $209/mo, and the lease goes until July of 2020. After reading MMM, I realize I'm just throwing away money so I'm trying to find a solution. I've learned their are websites that will help me find someone to take over my lease, but my problem comes from finding a car to replace it. Since I've been aggressively paying off debt, I don't have $5,000 saved to purchase a decent used car at the moment.
Should I reduce my debt payments for a few months to save up the cash for a car and get rid of the lease? Or does it make more sense to just start saving now to be able to purchase a car next July when my lease expires?
I know there's a lot here, so I greatly appreciate any and all help/advice. There's a lot to dive into here at MMM and I'm just starting to wrap my brain around it all!