### Author Topic: Paying Down Debt/"Cost Saving" Purchases  (Read 1586 times)

#### Helpless in Seattle

• 5 O'Clock Shadow
• Posts: 1
##### Paying Down Debt/"Cost Saving" Purchases
« on: April 04, 2015, 11:29:21 PM »
So I'm working on paying down some debt, with a goal of <2 years. About 100k from various places, none of it exceeding 5%, mostly under 3%. Not a great place and I can't call myself (or my family) a Mustachian, but we're making changes.

In any case, MMM recommends aggressively paying down the debt, which is what we want to do. So, what are the thoughts of making cost saving purchases where the cost savings are sort of unknown? Mathematically, of course, you want to make the purchase if its going to save you more money than the equivalent amount of debt you could pay down and the interest cost of that debt.

But I'd have to know how long it will take me to pay off the debt and also how much savings I'd get from a purchase. What brought up the thought was the Efergy, specifically, but also things like bikes, etc. I'm sure some people think these are more advanced steps and there are lots of other places I should cut back first.

I'm also concerned that maybe I'm just mentally subverting my attempts at being less materialistic.

#### lemanfan

• Pencil Stache
• Posts: 809
##### Re: Paying Down Debt/"Cost Saving" Purchases
« Reply #1 on: April 04, 2015, 11:42:12 PM »
For calculating savings from a specific thing, I would just make an assumption that seems reasonable on the dollar amount.  If it's really hard to guess, make one pessimistic and one optimistic assumption.

Say ... a bike.  The pessimistic guess might be that you eliminate one short car ride in ten, and that you get a little more energy through the exercise.  The optimistic guess might be that your gas bill for your car gets lowered by 30% to 50%, and that you turn your life around health-wise.  All depending on your siutation, of course.

#### MDM

• Walrus Stache
• Posts: 9413
##### Re: Paying Down Debt/"Cost Saving" Purchases
« Reply #2 on: April 05, 2015, 06:31:38 AM »
I'm sure some people think these are more advanced steps and there are lots of other places I should cut back first.
I'm also concerned that maybe I'm just mentally subverting my attempts at being less materialistic.
I think your instincts are good and both statements above are true.

But that's good - the first step toward solving a problem is recognizing that a problem exists, so good for you and best wishes moving forward!

#### Retired To Win

• Handlebar Stache
• Posts: 1494
• Age: 71
• Location: Virginia
• making the most of my time and my money
##### Re: Paying Down Debt/"Cost Saving" Purchases
« Reply #3 on: April 05, 2015, 01:55:29 PM »
Since the savings from the purchases would be unknown, the more certain thing would be to pay down the debt.