Saturday, October 02, 2004

The Hunt for (in the) Black October

Time for the monthly preview of what I hope to accomplish this month financially.

Here's where I stand at the beginning of the month.

On Monday, I'm mailing out a payment of $1008.85 to Arcadia Financial (What does that tell you about my credit history?) for my Jeep Cherokee payment. That should amount to over $800 being put towards the loan principal. That should bring my balance to down around $11, 650. I'm told I'm getting mailed a $100 check on Monday, I'm not counting on it, but if I have it by the end of the week, that will help me out some.

That's going to leave me with very little money available until 10/13. That week, I will be putting $100 into my Credit Union savings. My car insurance payment and cell phone (which is my only phone) total about another $100.00. If I have to dip into savings the week before, I will replace it here, rather than putting more on the credit card. I hope to leave about $200 in the checking account by the time the next week comes along.

The week of 10/20 I'll be making a credit card payment. I would like to make another $400 payment, or even $500. We'll see what happens. Another $100 into the savings will be used as well, so I will use as much as I can towards those priorities and still having enough for food and gasoline.

The week of 10/27, I'm going to try to follow the pattern of September, and save as much as I can towards making another $1000 payment to my car due on 11/6. I get paid on 11/3, so it seems like this might be possible once again. Looking ahead, I'm expecting a large payment in November with which I hope to make a huge dent in the car payment for December. (like possible cut the remaining balance in half.)

I ask the readers...if there are any...if I were to get say $5000 in November, is putting it towards that high interest car loan the wisest place for it? Or would there be a more worthwhile place for it? Keep in mind, my goals here are to be living a very simple lifestyle on a part time income by the middle of next year. Having no car payment and no credit card debt makes that much easier to achieve.

I appreciate the mention from the PFBlog website last week, which was really the inspiration for this somewhat shameless knockoff of the same concept...thanks.


evil_twin said...

If you're getting a windfall of 5K in November, I would pay off the credit card and put the remaining 3k in the car.
Or I pay off the cc and double up on the car payment and put the rest in a CD or something.

Oh yeah, that guy who said pay only the minimum on your bills is a idiot. Don't listen too him, pay off your debt and get a substantial savings in affect so you can use your own money instead of borrowing.

Anonymous said...

What are the interest rates on your debts?

WHY are you doing everything you've told us about? Why are you keeping thousands of dollars in bank and money market accounts when you've got credit cards you could pay off? If it's because they're at 0%, I doubt your car is. Are you saving up for something in particular? Would you not be better off paying off debt now and using credit then, if necessary? Or skipping the purchase?

If your interest rates are what I expect, you should immediately use up as much of your assets as would leave you with the least amount you can get by with, putting them towards your debts, highest interest rate first, and do the same with the $5000.

I'm sorry if I sound harsh. I really am trying to help here, and intend to check back.

B said...

My Arcadia Financial Car loan is 17.99% my Credit card is 12%. Both extremely high.

The reason I have money in savings is that there is a possibility I may be accepted to a two month training program, at which I would not be paid. I need to have "on hand" money to pay my bills during that time.

By the middle of next year, I want the Car and Card paid off. I want to only work secularly part time, and try to make some money doing something else in the other time. But to do that, I need no debt, and I'm going to need somewhat of a "nest egg" or "seed money" set aside. For then.

That's my reasoning.

Anonymous said...

You have your emergency fund, $1000, in Savings. I would suggest eliminating the Credit Card debt immediatley with funds from your Money Market account. Other than that, you are on the right path - monster payments on the car until it is paid off, and then save, save, save. You seem to be following steps similar to Dave Ramsey's methods, which I found to be beneficial as I took myself through the same thing you are doing now. The sooner you can pay for things with cash, the better. Eliminate that credit card, and get a Visa/MC debit card tied to your checking account.

Anonymous said...

I would put the extra 5k against the debt with the highest interest rate.

But I also think you should consider putting $3500 towards lowering your debts, as you would be left with roughly $6000 of debts if put all your cash plus the $5000 your expecting towards debt repayments, which could mean you could clear your debt in six months at your current repayment rate. After which you could put that amount into savings and three months after that you'd b back where you are now, just without the debt!