Author Topic: Here's My Situation. Advice would be appreciated  (Read 3221 times)

Nox

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Here's My Situation. Advice would be appreciated
« on: July 18, 2016, 08:13:22 PM »
My and wife and I (both 25) have the following debt:

  • Her Car - $2,755 @ 4.34%
  • My Car - $11,800 @ 1.9%
  • School Loan 1 - $7,266 @ 9%
  • School Loan 2 - $10,276 @ 4.5%

We have $6,500 in savings. I planned on building up a 3-month emergency fund which would be $10,000. But after reading some of MMM I am wondering if I should use the money to payoff more debt right away.

Also considering the major step of getting rid of my car and being a 1 car family for awhile until I can afford a used car.
« Last Edit: July 19, 2016, 09:00:53 PM by Nox »

sis

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Re: Here's My Situation. Advice would be appreciated
« Reply #1 on: July 18, 2016, 08:15:18 PM »
Did you accidentally submit before finishing?

We need way more information to help you out.  Salaries, fixed monthly costs, etc.

Nox

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Re: Here's My Situation. Advice would be appreciated
« Reply #2 on: July 18, 2016, 08:26:12 PM »
Yeah, I think it is fixed now.

Bracken_Joy

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Re: Here's My Situation. Advice would be appreciated
« Reply #3 on: July 18, 2016, 08:28:54 PM »
If you write a case study: http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/ We'll be able to help a lot more.

Specifically:
% rate your loans are at
Salary
Goals
Recurring expenses

Nox

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Re: Here's My Situation. Advice would be appreciated
« Reply #4 on: July 18, 2016, 08:41:35 PM »
OK, thank you I will do that.

MoolahLula

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Re: Here's My Situation. Advice would be appreciated
« Reply #5 on: July 19, 2016, 05:13:24 AM »
If one of you can do with a car, do it! 

Playing with Fire UK

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Re: Here's My Situation. Advice would be appreciated
« Reply #6 on: July 19, 2016, 05:49:15 AM »
Based on these numbers it doesn't look like you can afford a $11+k car.

If you can go down to one car do it (buy a bike); if you really can't then look at buying lower value car(s).

If the debt is a high interest rate (I would say 8%, but depends on a number of factors - salary, access to credit cards/LOC, regular financial commitments) then pay off the debt with the savings.

Where are the ~$3333 per month going? Can you cut back here?

Dmy0013

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Re: Here's My Situation. Advice would be appreciated
« Reply #7 on: July 19, 2016, 08:36:51 AM »
At a very minimum what are the % on the debts?

Nox

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Re: Here's My Situation. Advice would be appreciated
« Reply #8 on: July 19, 2016, 09:03:01 PM »
I added the interest rates to the original post above. Thanks for the input so far!

Bracken_Joy

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Re: Here's My Situation. Advice would be appreciated
« Reply #9 on: July 20, 2016, 06:35:44 AM »
I added the interest rates to the original post above. Thanks for the input so far!

It still doesn't give us much if we don't know how much you make and how much you spend... We don't have context for those numbers.

I will say, 9% for a school loan is obscene and you need that gone SOON.

soccerluvof4

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Re: Here's My Situation. Advice would be appreciated
« Reply #10 on: July 20, 2016, 09:38:12 AM »
^+1

little_brown_dog

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Re: Here's My Situation. Advice would be appreciated
« Reply #11 on: July 20, 2016, 09:46:15 AM »
With the limited info provided, I would go for SL #1 first. That 9% interest rate is terrible. Destroy that first, then work on SL #2, then her car. Some people here don’t bother paying down loans with interest rates under 5% (they would rather put the money in investments with the idea that they will probably make better than a 4% return on that money over time), but I personally don’t enjoy debt and think paying off a 4-5% loan is often worth it.

KCM5

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Re: Here's My Situation. Advice would be appreciated
« Reply #12 on: July 20, 2016, 10:31:00 AM »
With the limited info provided, I would go for SL #1 first. That 9% interest rate is terrible. Destroy that first, then work on SL #2, then her car. Some people here donít bother paying down loans with interest rates under 5% (they would rather put the money in investments with the idea that they will probably make better than a 4% return on that money over time), but I personally donít enjoy debt and think paying off a 4-5% loan is often worth it.

I agree with the bolded above. But I would also sell a car. If they're both reliable, sell the more expensive one. If you're underwater on it, use some of your money to fix that issue. Also, keep a bit for emergencies ($1k?).