My Money Story – Debt Pay-off Plan

To pay, or to pay extra: that is the question…

Early this month I had a different plan of how to reduce my debt. Research after research I was overwhelmed with ideas and how to’s. Pay that mortgage early or pay it slow! Buy a car with cash, avoid the loan! Interest rates are low, take a loan and build credit… you get the idea. I do want to get rid of debt, but I also don’t want to drive myself up the wall and eat dry ramen noodles all day. I prioritized and this is my game plan.

Do I like owing money? No

Does it help my credit? Yes

Case for mortgage – keep making regular payments

I found an ability to move and rent it my townhouse. Now I live with my boyfriend splitting the rent. Being a first-time landlord I managed to find great tenants and after all house and renting expenses I have some passive income coming my way. As a bonus it lets me build my credit history.

Case for car loan – make extra payments

Last years unexpected death of my car pushed me into a car loan and additional parents loan. My choice fell on used Subaru Legacy. It’s 4WD( winters are brutal here) it will run for years and has a good trade in value if I ever want to sell it. Although the interest rate is low due to shorter loan period of 42 months, I plan on making extra payments. If my math is right it will be 6 months sooner than expected.

Case for education – save, save and save

This one is simple. I don’t want another loan, especially school loan. Savings, scholarships, grants, side hustle and whatever else I can do to graduate with zero debt.

Case for parents loan – give back ASAP

I was able to borrow $5,000 from parents in 2015 and $6,000 last year. That is the loan I hate to have the most. I’m grateful for it and I want to give it back to them ASAP.

Mortgage aside I will concentrate on paying off the car, saving for school and left over will go to paying back parents. I’m still in the making for the perfect plan, but it’s a good start.

 

 

4 thoughts on “My Money Story – Debt Pay-off Plan”

  1. Good to hear you’ve got a good plan. I agree with the idea of getting the loan paid off to your family first. Those sorts of loans are the ones that always make you feel the worst, so paying off as much as you can (as long as you are still making repayments elsewhere), will make you feel much better about your situation.

    Liked by 1 person

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