Author Topic: Lump Sum Debt Payoff - requesting second opinion  (Read 5224 times)

briefus

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Lump Sum Debt Payoff - requesting second opinion
« on: May 10, 2017, 01:44:48 PM »
Hey MMM'rs... somewhat newbie here and I have an opportunity I'd like to just bounce off the forums to see if I'm thinking clearly. I've recently gone through a divorce and due to the imbalance in salaries I had to claim all the consumer debt my Ex had racked up... It seems that in most cases, people will always say to pay off consumer debt first before focusing on Student Loans, mostly due to the interest rates, and the affect it could have on your credit scores, etc, but I'm thinking my sitch may be different... and advice welcomed...

Summary: 5 Debts to work with
Student Loans: $7,800 at 03%   MinPymt = $395
Credit Debt 1:   $6,600 at 08%   MinPymt = $140
Credit Debt 2:   $5,400 at 15%   MinPymt = $120
Credit Debt 3:   $1,300 at 30%   MinPymt = $35
Credit Debt 4:   $1,100 at 15%   MinPymt = $30

I currently have about $9000 cash that I plan on throwing at this debt at once...
My monthly Nut (money left after necessary expenses) is $1,400.00 and this is what I'll be putting towards debt starting next month.

My question is... even though the student loans are a smaller interest rate, it seems like it'd make more sense to pay off the student loan debt with the lump sum so that I could have almost $400 more available per month to through at the other stuff, as well as have a larger security blanket if something unexpected was to happen in that month. If I used the lump sum to payoff Credit Debt 1 & 3 (for example), I'm only freeing up an extra $150 monthly, as opposed to $400...

Any input on this? I don't care about my credit score right now... not an issue. And debt calculators show that I'd have everything paid off within 12 months, regardless of the debts I payoff with the lump sum so in the long-run it doesn't make much difference... just thought it'd be nice to have the extra $200 buffer... Thoughts?

boarder42

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #1 on: May 10, 2017, 01:48:18 PM »
htats the incorrect way to look at this.

You pay off the highest interest debt first its costing you the most.

Pay down your Credit debts 23 and 4 and part of 1 with the 9k

once the credit is paid off i'd personally keep the SL debt.  and invest in your work 401k.  - you should be putting in up to company match before paying down the other debts.

CheapskateWife

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #2 on: May 10, 2017, 01:52:51 PM »
Highly recommend you take a look at the snowball debt calculator below....it was super helpful for us in making these kinds of decisions about our debt and how to order our payments:

https://www.vertex42.com/Calculators/debt-reduction-calculator.html

Abooki

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #3 on: May 10, 2017, 02:01:17 PM »
Another way of looking at it atleast in times of Credit Card Debt is looking  not only what you owe and the interest rate it is at. It is looking at how MUCH that debt is costing you per year, per day or month. And you can do that by multiply the interest rate by the debt and then dividing that by 12(to get per month), 365(to get per day).Based on your debt:
 $5,400 at 15%  is costing you $810 per year and $67.5 per month
vs $1,300 at 30%   is costing you $390 per year and 32.50 per month.

If you just decided to pay off the high interest one without considering how much it really costs you you will end up paying more.
 Then after those two I would go for the next high cost ones.

I hope that helps.



Life in Balance

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #4 on: May 10, 2017, 02:05:40 PM »
If you have $9000, I'd suggest paying off Credit cards 2-4.  Then if you're worried about cashflow, keep the rest as an emergency fund.  That way you can focus on funneling the $1400/month to the remaining credit card.  It'll be paid off in 4 months.  Then, let the student loans get paid off over time as you ramp up contributions for retirement.

kelvin

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #5 on: May 10, 2017, 02:06:34 PM »
Agreed! The CC debt @ 30% - OUCH! If you leave that debt alone, it's growing by $390/year. Kill it. Kill it with fire.

The student loan @ 3% is low enough to almost consider investing the money instead of just paying it outright. When you invest the $7.8k, it'll need to earn 2% to cover inflation + 3% to cover the cost of keeping the student loan, so if you can invest the $7.8k at a rate of return > 5% you should come out ahead. Maybe. There's fees. Matching an employer in a 401k is the simplest way, if you live in the US, as mentioned by boarder42. 

Have fun playing with the amortization tables, and best of luck.

Proud Foot

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #6 on: May 10, 2017, 02:08:38 PM »
Summary: 5 Debts to work with
Student Loans: $7,800 at 03%   MinPymt = $395
Credit Debt 1:   $6,600 at 08%   MinPymt = $140
Credit Debt 2:   $5,400 at 15%   MinPymt = $120
Credit Debt 3:   $1,300 at 30%   MinPymt = $35
Credit Debt 4:   $1,100 at 15%   MinPymt = $30

I currently have about $9000 cash that I plan on throwing at this debt at once...
My monthly Nut (money left after necessary expenses) is $1,400.00 and this is what I'll be putting towards debt starting next month.


The SL isn't too bad and at that rate it is usually put at the bottom of the list for debts and behind investing.  Payoff Debts 2, 3, and 4.  If you are worried about things coming up and needing money for it then keep the remaining $1,200.  But with $1,400 extra each month you would be better off putting the remaining amount to loan 1.  The only time I wold ever advocate for paying off a low interest rate loan before a high rate loan would be if it was your smallest balance by a decent margin and you were having cash flow issues (after already cutting spending to bare bones).

boarder42

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #7 on: May 10, 2017, 02:30:46 PM »
Another way of looking at it atleast in times of Credit Card Debt is looking  not only what you owe and the interest rate it is at. It is looking at how MUCH that debt is costing you per year, per day or month. And you can do that by multiply the interest rate by the debt and then dividing that by 12(to get per month), 365(to get per day).Based on your debt:
 $5,400 at 15%  is costing you $810 per year and $67.5 per month
vs $1,300 at 30%   is costing you $390 per year and 32.50 per month.

If you just decided to pay off the high interest one without considering how much it really costs you you will end up paying more.
 Then after those two I would go for the next high cost ones.

I hope that helps.

this is entirely incorrect mathmatically paying off a higher interest loan first will always beat paying off a lower interst loan there is no magic juju that can be dont to change that. 

briefus

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #8 on: May 10, 2017, 02:33:36 PM »
Damn, and that's why I came here... Thanks everyone. I know "because math" it makes more sense to pay off high rates first, but I figured since it's ALL going to paid off within 12 months, I had some flexibility. I already have an Emergency Fund built up that sits at $2500 and doesn't get touched, so I guess it's better off to go ahead and pay of the consumer debt first and tackle the SL's later.

Thanks everyone for the input, much appreciated... and other than my MTG, I'm looking forward to be debt-free in the very near future! :)

Abooki

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #9 on: May 17, 2017, 06:55:41 AM »
Another way of looking at it atleast in times of Credit Card Debt is looking  not only what you owe and the interest rate it is at. It is looking at how MUCH that debt is costing you per year, per day or month. And you can do that by multiply the interest rate by the debt and then dividing that by 12(to get per month), 365(to get per day).Based on your debt:
 $5,400 at 15%  is costing you $810 per year and $67.5 per month
vs $1,300 at 30%   is costing you $390 per year and 32.50 per month.

If you just decided to pay off the high interest one without considering how much it really costs you you will end up paying more.
 Then after those two I would go for the next high cost ones.

I hope that helps.

this is entirely incorrect mathmatically paying off a higher interest loan first will always beat paying off a lower interst loan there is no magic juju that can be dont to change that.

I didn't for a second say that paying off the lowest interest loan is best. Look at my statement it is paying off what costs you most per day(and this cost is based on the interest rate and the amount). You can't tell me that someone owing 100$ at 20% and someone owing 300$ at 15% pay the same in interest pay day or per day. Per year that would be 20 dollars and 45 dollars respectively. But lets say if it is 100$ at 20% and 100$ at 15% it is obvious that you would pay the 100% at 20 first since it costs you 20$ per year vs the 100$ at 15% that costs you 15 $ per day. Please reread my post.

radram

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #10 on: May 17, 2017, 07:34:50 AM »
Damn, and that's why I came here... Thanks everyone. I know "because math" it makes more sense to pay off high rates first, but I figured since it's ALL going to paid off within 12 months, I had some flexibility. I already have an Emergency Fund built up that sits at $2500 and doesn't get touched, so I guess it's better off to go ahead and pay of the consumer debt first and tackle the SL's later.

Thanks everyone for the input, much appreciated... and other than my MTG, I'm looking forward to be debt-free in the very near future! :)

I know the importance of an emergency fund. However, with your cash flow, I would not have one until all CC debt was gone, especially since it is all gone in such a short time. Your emergency fund for these 2 months would be the monthly extra you are putting toward your debts, plus your credit you just paid off.

In your case I would do this:

Take your 9k AND your 2.5k and pay off ALL the 2,3 and 4  CC debt, and put the rest into CC#1. Take everything you make monthly into finishing off CC 1. That should be about 2 months. Saving 2.5k at 0% for a just-in-case does not make sense to me when you have an 8% debt.

Now you are in a position to decide to go the invest/pay minimum vs knock out the rest of student debt debate. If you choose to pay student minimum, then pay the minimum student debt, and build your emergency fund back up, then invest.  If you want to pay it off, then pay it off before building up your emergency fund.

I personally go against what math says here and I would knock out all the debt, student debt last. We did that with our mortgage and the emotional high was so worth it. If this was your ex's student debt then that makes it an even easier decision.

Keep us updated as you go. I will toast your progress from afar :)

Vindicated

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #11 on: May 17, 2017, 08:02:31 AM »
Another way of looking at it atleast in times of Credit Card Debt is looking  not only what you owe and the interest rate it is at. It is looking at how MUCH that debt is costing you per year, per day or month. And you can do that by multiply the interest rate by the debt and then dividing that by 12(to get per month), 365(to get per day).Based on your debt:
 $5,400 at 15%  is costing you $810 per year and $67.5 per month
vs $1,300 at 30%   is costing you $390 per year and 32.50 per month.

If you just decided to pay off the high interest one without considering how much it really costs you you will end up paying more.
 Then after those two I would go for the next high cost ones.

I hope that helps.

this is entirely incorrect mathmatically paying off a higher interest loan first will always beat paying off a lower interst loan there is no magic juju that can be dont to change that.

I didn't for a second say that paying off the lowest interest loan is best. Look at my statement it is paying off what costs you most per day(and this cost is based on the interest rate and the amount). You can't tell me that someone owing 100$ at 20% and someone owing 300$ at 15% pay the same in interest pay day or per day. Per year that would be 20 dollars and 45 dollars respectively. But lets say if it is 100$ at 20% and 100$ at 15% it is obvious that you would pay the 100% at 20 first since it costs you 20$ per year vs the 100$ at 15% that costs you 15 $ per day. Please reread my post.

Assuming you didn't have enough to pay both of these debts ($5,400 + $1,300), but only had $5,400 and could pay off ONE of them, you wouldn't pay off the $5,400.  You'd pay $1,300 of the higher interest, then $4,100 of the $5,400, leaving $1,300 of the lower interest debt remaining.

That's the point boarder was making.

Heroes821

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #12 on: May 17, 2017, 08:24:50 AM »
I don't see it mentioned in other posts, but also remember that the student loan debt should Tax deductible too, which while small still makes paying it off last better than paying it off first.

FLBiker

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #13 on: May 17, 2017, 09:40:28 AM »
Another way of looking at it atleast in times of Credit Card Debt is looking  not only what you owe and the interest rate it is at. It is looking at how MUCH that debt is costing you per year, per day or month. And you can do that by multiply the interest rate by the debt and then dividing that by 12(to get per month), 365(to get per day).Based on your debt:
 $5,400 at 15%  is costing you $810 per year and $67.5 per month
vs $1,300 at 30%   is costing you $390 per year and 32.50 per month.

If you just decided to pay off the high interest one without considering how much it really costs you you will end up paying more.
 Then after those two I would go for the next high cost ones.

I hope that helps.

this is entirely incorrect mathmatically paying off a higher interest loan first will always beat paying off a lower interst loan there is no magic juju that can be dont to change that.

I didn't for a second say that paying off the lowest interest loan is best. Look at my statement it is paying off what costs you most per day(and this cost is based on the interest rate and the amount). You can't tell me that someone owing 100$ at 20% and someone owing 300$ at 15% pay the same in interest pay day or per day. Per year that would be 20 dollars and 45 dollars respectively. But lets say if it is 100$ at 20% and 100$ at 15% it is obvious that you would pay the 100% at 20 first since it costs you 20$ per year vs the 100$ at 15% that costs you 15 $ per day. Please reread my post.

Assuming you didn't have enough to pay both of these debts ($5,400 + $1,300), but only had $5,400 and could pay off ONE of them, you wouldn't pay off the $5,400.  You'd pay $1,300 of the higher interest, then $4,100 of the $5,400, leaving $1,300 of the lower interest debt remaining.

That's the point boarder was making.
+100

RWD

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #14 on: May 17, 2017, 10:09:32 AM »
You have enough to pay off all the 15%+ interest debt all at once. Do so. Then focus on the next highest interest rate (8%). After that is gone you're probably better investing rather than trying to pay off the 3% rate faster.

In your specific scenario I calculate that paying off the high interest first instead of the student loan first will save you at least $280 in interest.

Another useful calculator:
http://unbury.us/

frugaliknowit

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #15 on: May 17, 2017, 11:44:32 AM »
1.  Research the deductibility of the SL's so you know.  Adjust the interest rate accordingly (< or =3%).

There's 2 methods:

1.  Cascade (most optimal):  Highest interest rate first, while paying the minimums on the rest.

2.  Snowball (designed for maximum morale):  Smallest balance first, paying minimums on the rest.

Either one is ok.  If you are a "tough guy", I would go with number 1.  I wouldn't worry about where the minimums end up, unless that is a problem. 

briefus

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #16 on: May 19, 2017, 08:55:45 AM »
Summary: 5 Debts to work with
Student Loans: $7,800 at 03%   MinPymt = $395
Credit Debt 1:   $6,600 at 08%   MinPymt = $140   - PAID OFF
Credit Debt 2:   $5,400 at 15%   MinPymt = $120
Credit Debt 3:   $1,300 at 30%   MinPymt = $35     - PAID OFF
Credit Debt 4:   $1,100 at 15%   MinPymt = $30     - PAID OFF

Edit:
Attorney:          $1,100 at 01%
Family:                 $600 at 00%                                - PAID OFF
Folks, thanks again for the advice... much appreciated!

As of this morning, I'm happy to say that I've paid off Debts 1, 3, and 4, for a total of $9,600 in cleared debt. I paid off 1 instead of 2 because of an error on my part in the APR. APR of debt 1 was actually 16.74%, which was just a tad bit higher than #2.  I also paid my father $600 I owed him for helping me finish a privacy fence needed for the dogs and the new dog sitter while/if I'm travelling for work. I didn't want family debt hanging over my head so I wanted to take care of that ASAP. I edited the OP to include those two debts as well.

I chose not to touch my emergency fund yet, as I know I have a auto maintenance bill coming up in the range of $1000-1300 (timing belt replacement on Acura RL). Hopefully I can get that taken care of this month as well, and use the rest to toss at Debt 2.

I'm going to stay really tight on budget and spending in the coming months and hopefully I can get everything except my student loans closed out in 3 months. Once I'm there I'll decide whether to pay off SL's, or start investing. I'll follow up with more updates as they come along. Thanks again!


Heroes821

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #17 on: May 19, 2017, 08:59:12 AM »
Congrats!

I would shop around on that timing belt. Are you under warranty? that seems excessive for a belt replacement.

RWD

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #18 on: May 19, 2017, 09:06:05 AM »
Summary: 5 Debts to work with
Student Loans: $7,800 at 03%   MinPymt = $395
Credit Debt 1:   $6,600 at 08%   MinPymt = $140   - PAID OFF
Credit Debt 2:   $5,400 at 15%   MinPymt = $120
Credit Debt 3:   $1,300 at 30%   MinPymt = $35     - PAID OFF
Credit Debt 4:   $1,100 at 15%   MinPymt = $30     - PAID OFF

Edit:
Attorney:          $1,100 at 01%
Family:                 $600 at 00%                                - PAID OFF
Folks, thanks again for the advice... much appreciated!

As of this morning, I'm happy to say that I've paid off Debts 1, 3, and 4, for a total of $9,600 in cleared debt. I paid off 1 instead of 2 because of an error on my part in the APR. APR of debt 1 was actually 16.74%, which was just a tad bit higher than #2.  I also paid my father $600 I owed him for helping me finish a privacy fence needed for the dogs and the new dog sitter while/if I'm travelling for work. I didn't want family debt hanging over my head so I wanted to take care of that ASAP. I edited the OP to include those two debts as well.

I chose not to touch my emergency fund yet, as I know I have a auto maintenance bill coming up in the range of $1000-1300 (timing belt replacement on Acura RL). Hopefully I can get that taken care of this month as well, and use the rest to toss at Debt 2.

I'm going to stay really tight on budget and spending in the coming months and hopefully I can get everything except my student loans closed out in 3 months. Once I'm there I'll decide whether to pay off SL's, or start investing. I'll follow up with more updates as they come along. Thanks again!

Nice work!

I'm seeing a range of $560 - $720 for a timing belt replacement on an Acura RL according to repairpal.com. Though I don't believe that includes replacing the water pump and anything else that might be done at the same time. I would second the suggestion to call around to get a few more quotes.

Vindicated

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #19 on: May 19, 2017, 09:08:32 AM »
Summary: 5 Debts to work with
Student Loans: $7,800 at 03%   MinPymt = $395
Credit Debt 1:   $6,600 at 08%   MinPymt = $140   - PAID OFF
Credit Debt 2:   $5,400 at 15%   MinPymt = $120
Credit Debt 3:   $1,300 at 30%   MinPymt = $35     - PAID OFF
Credit Debt 4:   $1,100 at 15%   MinPymt = $30     - PAID OFF

Edit:
Attorney:          $1,100 at 01%
Family:                 $600 at 00%                                - PAID OFF
Folks, thanks again for the advice... much appreciated!

As of this morning, I'm happy to say that I've paid off Debts 1, 3, and 4, for a total of $9,600 in cleared debt. I paid off 1 instead of 2 because of an error on my part in the APR. APR of debt 1 was actually 16.74%, which was just a tad bit higher than #2.  I also paid my father $600 I owed him for helping me finish a privacy fence needed for the dogs and the new dog sitter while/if I'm travelling for work. I didn't want family debt hanging over my head so I wanted to take care of that ASAP. I edited the OP to include those two debts as well.

I chose not to touch my emergency fund yet, as I know I have a auto maintenance bill coming up in the range of $1000-1300 (timing belt replacement on Acura RL). Hopefully I can get that taken care of this month as well, and use the rest to toss at Debt 2.

I'm going to stay really tight on budget and spending in the coming months and hopefully I can get everything except my student loans closed out in 3 months. Once I'm there I'll decide whether to pay off SL's, or start investing. I'll follow up with more updates as they come along. Thanks again!

Way to go!  Doesn't it feel great? :)

boarder42

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #20 on: May 19, 2017, 09:09:24 AM »
good work.  you should be in good shape soon to start getting your money working for you.  keep your spending tight and dont inflate your lifestyle after debt payoff.  every dollar you save now is worth a whole lot more than a dollar saved in 5 years.

Abooki

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #21 on: May 19, 2017, 12:16:55 PM »
Great Job!!!!!

briefus

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #22 on: May 22, 2017, 09:29:36 AM »
I'm assuming it doesn't matter too much in the long run... but as I pay off these credit cards I'm leaning towards closing the accounts down all together instead of leaving them open with a $0 balance. None of them are great "rewards" cards.  It'd make more sense to close and re-open a new card with proper benefits if I choose to go that route in the future... right? pros/cons? thanks.

radram

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #23 on: May 22, 2017, 09:33:43 AM »
I'm assuming it doesn't matter too much in the long run... but as I pay off these credit cards I'm leaning towards closing the accounts down all together instead of leaving them open with a $0 balance. None of them are great "rewards" cards.  It'd make more sense to close and re-open a new card with proper benefits if I choose to go that route in the future... right? pros/cons? thanks.

Makes good sense to me.  I would open before closing.

Abooki

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #24 on: May 22, 2017, 09:55:22 AM »
I'm assuming it doesn't matter too much in the long run... but as I pay off these credit cards I'm leaning towards closing the accounts down all together instead of leaving them open with a $0 balance. None of them are great "rewards" cards.  It'd make more sense to close and re-open a new card with proper benefits if I choose to go that route in the future... right? pros/cons? thanks.

It makes sense in some regard. I suggest leaving the oldest card since based on credit score they tend to take that in consideration when calculating your credit score.

Bracken_Joy

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #25 on: May 22, 2017, 10:12:19 AM »
I'm assuming it doesn't matter too much in the long run... but as I pay off these credit cards I'm leaning towards closing the accounts down all together instead of leaving them open with a $0 balance. None of them are great "rewards" cards.  It'd make more sense to close and re-open a new card with proper benefits if I choose to go that route in the future... right? pros/cons? thanks.

If they have a fee, close them, or call and ask for it to be waived. Otherwise leave them open so they live on your credit report longer, improving the 'average age of credit' and 'lines of credit' (they like this to be high, just not TOOOOO high- but for most people, more is better). Mind you, this may not matter much if you won't be using your credit, since you already have a house and such.

Definitely do not close your oldest card. If it does have a fee but isn't good rewards, open a new card with the same company without any fee, and that should preserve the age of the credit, depending on the company.

boarder42

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #26 on: May 22, 2017, 10:34:54 AM »
I'm assuming it doesn't matter too much in the long run... but as I pay off these credit cards I'm leaning towards closing the accounts down all together instead of leaving them open with a $0 balance. None of them are great "rewards" cards.  It'd make more sense to close and re-open a new card with proper benefits if I choose to go that route in the future... right? pros/cons? thanks.

NOOOOO....
dont do this.  before you explore selling tradelines. 

https://forum.mrmoneymustache.com/share-your-badassity/selling-tradelines-piggybacking-part-ii-$1000hr-20-40kyr-side-gig/?topicseen

If the cards have annual fees then you can usually drop them to a different card. If that cant happen making 150 a month per user up to 5 users depending on the bank is worth a ton.


Abooki

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #27 on: May 22, 2017, 12:11:11 PM »
I'm assuming it doesn't matter too much in the long run... but as I pay off these credit cards I'm leaning towards closing the accounts down all together instead of leaving them open with a $0 balance. None of them are great "rewards" cards.  It'd make more sense to close and re-open a new card with proper benefits if I choose to go that route in the future... right? pros/cons? thanks.

NOOOOO....
dont do this.  before you explore selling tradelines. 

https://forum.mrmoneymustache.com/share-your-badassity/selling-tradelines-piggybacking-part-ii-$1000hr-20-40kyr-side-gig/?topicseen

If the cards have annual fees then you can usually drop them to a different card. If that cant happen making 150 a month per user up to 5 users depending on the bank is worth a ton.

WOW i didn't know about this. I will definitely be checking this out today too. Thank you for sharing!

briefus

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #28 on: August 24, 2017, 07:43:38 AM »
Wow. Thank you to everyone who has provided advice and suggestions on here. I really appreciate it! I'm very excited to report that I will be paying off my last bit of consumer/credit debt off TOMORROW in a lump sum of about $3500 to capital one. It looks like my credit score is soaring right now, so I'll probably look to stop using all these cards and get one for regular expenses that has a much better rewards program that fits my needs (most of mine are old and dated without much benefit of spending). Once I pay this off and get my new setup in place.... I'll probably research a little more about what boarder has posted with "selling tradelines"... seems like it could be risky, but also a nice small consistent income on the side when done properly.

Thanks again, and when I'm celebrating with a nice steak dinner tomorrow night, I'll blissfully enjoy it knowing I'm (excluding mortgage)... Credit-Debt-FREE!!! WOOHOO!

NOOOOO....
dont do this.  before you explore selling tradelines. 

https://forum.mrmoneymustache.com/share-your-badassity/selling-tradelines-piggybacking-part-ii-$1000hr-20-40kyr-side-gig/?topicseen

If the cards have annual fees then you can usually drop them to a different card. If that cant happen making 150 a month per user up to 5 users depending on the bank is worth a ton.

Finances_With_Purpose

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #29 on: August 24, 2017, 08:04:42 AM »
Wow. Thank you to everyone who has provided advice and suggestions on here. I really appreciate it! I'm very excited to report that I will be paying off my last bit of consumer/credit debt off TOMORROW in a lump sum of about $3500 to capital one. It looks like my credit score is soaring right now, so I'll probably look to stop using all these cards and get one for regular expenses that has a much better rewards program that fits my needs (most of mine are old and dated without much benefit of spending). Once I pay this off and get my new setup in place.... I'll probably research a little more about what boarder has posted with "selling tradelines"... seems like it could be risky, but also a nice small consistent income on the side when done properly.

Thanks again, and when I'm celebrating with a nice steak dinner tomorrow night, I'll blissfully enjoy it knowing I'm (excluding mortgage)... Credit-Debt-FREE!!! WOOHOO!

NOOOOO....
dont do this.  before you explore selling tradelines. 

https://forum.mrmoneymustache.com/share-your-badassity/selling-tradelines-piggybacking-part-ii-$1000hr-20-40kyr-side-gig/?topicseen

If the cards have annual fees then you can usually drop them to a different card. If that cant happen making 150 a month per user up to 5 users depending on the bank is worth a ton.

Awesome!  Yeah, pay off the credit card debts, highest-rate ones first. 

Also, it's a huge boost to just pay something off.  That's worth as much as a snowball.  And the interest rates you have are crazy by comparison to student loans.  You'll be very happy you paid the student loans off last.

And, you're going to be done soon regardless!  So congrats!!!

boarder42

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #30 on: August 24, 2017, 08:25:01 AM »
income is a little inconsistent with selling tradeline since the mustachians have flooded the market place but i'm currenly pulling around 1k a month on avg this year.  hoping that it continues to rise.

kelvin

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #31 on: August 29, 2017, 11:36:59 AM »
Great job! Keep it up ;)

Dicey

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Re: Lump Sum Debt Payoff - requesting second opinion
« Reply #32 on: August 29, 2017, 02:26:10 PM »
Woo-hoo, I loves me a good update! Congratulations on killing the debt.