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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: dizzean on March 20, 2013, 10:14:39 AM

Title: What next?
Post by: dizzean on March 20, 2013, 10:14:39 AM
Hey guys, thanks for your assistance with my past career post.

I have another question for you all.

My wife and I are currently working towards mustachianism and we are set to pay off our CC debt this month which leaves me with my next question, what to pay off next?

We bought a house for $60k last year and according to our realtor it's worth $75k right now and possibly $90k with a little bit of doable renovation/painting and such.

We owe about 30k in student loans, 60k on the house, and $7500 on the car and $1300 in CC debt which we will pay off this month. We make $4200 a month and have $1700 left over in our budget (give or take other purchases)

The car is what my question is about, we foolishly bought it brand new for $15k two years ago with putting $5k down.  It is a 2011 Ford Fiesta with our payments being $169 a month and $75 a month on insurance.  If we sold it right now according to KBB we could get $9k which actually puts us ahead on the car.  Our other car is a 1994 Honda Civic DX with 99k miles on it that I got for $2200 6 months ago when we started our path down frugal-dom.

I'm wondering, should I sell the Fiesta and try to buy another reliable older car or pay off the Fiesta in 6 months and just keep driving it?  We both really like the car, how it drives and it's super fuel efficient.

We are working on finding jobs or moving to allow for us to only have one car, currently we each drive 30 miles on average round trip for work and if we sell our house we actually come out ahead maybe $10k after is said and done..but that is a discussion for another day based on if we find new jobs and what not.

What are your thoughts?
Title: Re: What next?
Post by: smedleyb on March 20, 2013, 10:18:45 AM
CC, then car, then student debt, then house.

And I vote keep the Fiesta for the next 15 years.
Title: Re: What next?
Post by: dizzean on March 20, 2013, 10:32:03 AM
CC, then car, then student debt, then house.

And I vote keep the Fiesta for the next 15 years.

My only problem with that is that if when we go down to 1 car, I kind of want a hatchback for the added carrying capacity.
Title: Re: What next?
Post by: Vilx- on March 20, 2013, 11:10:15 AM
+1 for keeping the Fiesta and paying that down first, since it probably has the highest interest rate. It's better than the old car in every way imaginable. It will last you much longer and it will use less gas. Of course, you'll have to take good care of it, but that goes without saying (skipping oil changes is not a very mustachian choice in the long term).
Title: Re: What next?
Post by: brewer12345 on March 21, 2013, 09:21:51 AM
Pay down the student loans after you finish with the cards.  Student loan debt is the only kind of debt you cannot shake by declaring bankruptcy or selling an asset that secures the loan.  Get rid of it ASAP.
Title: Re: What next?
Post by: dizzean on March 22, 2013, 03:17:13 PM
Think it could be worth maybe selling the Fiesta and/or going to the dealership and spending the extra like $2k for the hatchback version?
Title: Re: What next?
Post by: Self-employed-swami on March 22, 2013, 03:27:58 PM
What are the interest rates on the debts? I'd pay off the highest interest debt first.
Title: Re: What next?
Post by: Richard3 on March 22, 2013, 03:39:01 PM
What are the interest rates on the debts? I'd pay off the highest interest debt first.

This is almost always the correct answer.