Okay, this is my first Blog entry so bear with me. I hopefully gave you a quick snapshot of my families situation under my info. What I'd like to throw out there today is my thought process on my 2008 goal of paying off my Auto Loans.
First of all, both loans were for 60 mos and I had no previous intentions of paying them off early. I got lucky enough to purchase both vehicles a few years back when interest rates were quite nice.
However, I was bored at work one day and was looking at my Money Market accounts interest. It got ~4.25% last month, well not actually 4.25% but 4.25%/12 or the equivalent monthly amount. Anyway... in the past I never thought about taxes, and since I am fortunate enough to still be in the 15% tax bracket and I was getting upwards of 5% on my Money Market I never looked into paying off my low interest debts early.
STATS:
Truck Loan: 3.25% - 16 Pmts Left
Car Loan: 3.9% - 29 Pmts Left
MMKT (4.25%) - Tax: 3.6% Yield
So now with the lower money market rate I set my 2008 goal to pay off my Car loan before I put my usual $500 a month into savings/investments.
So, $500 plus the approx $300 / mo that goes to principal on the car should get me paid off by Dec 08.
Now, in my mind there is a small struggle with the truck loan as to whether to pay it off early or not after the car loan. I am leaning towards knocking it out as I should be getting extra income starting this summer as I will be deployed.
There is no telling how this will go. We have a pretty tight budget set and even though I am comfortable with it, I am sure there will be things I didn't account for especially considering we have a newborn Son.
Wish us luck...
2008 Goal - changing course, getting rid of debt...
December 28th, 2007 at 08:02 pm
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