Life Situation: My wife and I have been married for almost three years now, so we were able to claim the American Opportunity tax credit for those years ($2500 per student * 2 = $5000 each year). We live in Texas, and are both graduating with our bachelors in Software Engineering.
Gross Salary/Wages: I am working 40 hours a week making $61,000, and finishing my degree. Once I have it, I should get a pay raise. My wife is a full time student, and will (hopefully) get a job when she graduates in August making $70,000. My take home is $1,947 every other week.
Expenses:
Per Week Per Month Per 1/2 Year Per Year Per Paycheck
Savings 0 0 0 0 0
Loan Payback 0 0 0 0 0
Gas 32 139 832 1664 64
Car/Emergency 0 0 0 0 0
Car Insurance 0 0 0 0 0
Internet/TV 8 36 216 432 17
Food 40 172 1032 2064 79
Pets 2 10 60 120 5
Rent 277 1200 7200 14400 554
Living Essent. 12 50 300 600 23
Netflix/Hulu 5 23 138 276 11
Amelia (car loan) 85 370 2220 4440 171
Total 461 2000 11998 23996 923
Per paycheck we have $1,947 - $923 which leaves us with roughly $1,000 surplus each paycheck.
Credit cards-
Card Balance Limit APR%
Bank of America 123 103 2500 11.49%
Bank of America 123 #2 9 1500 11.49%
BoA Better Balance 7,107 8000 0% until May 17th 2017 //from student loans (see note below)
Citi Simplicity 3,246 5300 0% until March 19th 2017 //from student loans
Capital One Quicksilver 4,173 5000 0% until May 4th 2017 //from student loans
Cap1 Quicksilver #2 188 8000 20.3%
Discover 1 93 1000 20.49%
Discover 2 26 1300 17.49%
Wells Fargo 0 1200 14.4%
Grand total = $14,945 @ 0% interest (we pay the non-promotional cards in full each statement)
(The reason we have so many high-balance 0% cards is because we had Discover Private loans that were accruing $30 dollars a day of interest, so we transferred them all to 0% cards, knowing we'd be able to pay them all off by the time the promotion ended)
Loans-
Car loan is $18,200 @ 2.49% interest
Loan name Amount Minimum payment APR%
Fedloan 1 1000 10 4.29
Fedloan 2 1000 10 4.29
Fedloan 3 4500 46 4.29
Fedloan 4 5500 55 3.76
Fedloan 5 6000 62 4.29
Fedloan 6 7000 70 3.76
Greatlakes 1 5500 55 3.76
Greatlakes 2 6027 42 3.86
Greatlakes 3 6952 49 4.66
Greatlakes 4 7000 70 3.76
Grand total $50,479 $449 per month starting December 2017 4.06% avg
Investments:
Account Balance Interest APR
Ally 29,000 1.00%
Merrill Edge IRA 4,380 SPY
Merrill Edge CMA 600 Cash
Specific Question(s):
We are keeping $14,500 in the Ally account to pay off the 0% cards before their promotional period expires (to collect that sweet $12 a month in the meantime!), and the other $14,500 is for emergency fund. What should we do with our extra $1000 per paycheck? We get 30 free trades each month with our Merrill Edge account, so what ETF’s should we buy? Do you think we should invest in the stock market and make minimum payments on our student loans for 10 years (because the interest rates on the loans are roughly 4%), or pay off the loans completely (for a ‘guaranteed’ 4% return)?