Tuesday, September 13, 2011

"Extra money"

Saw this in another blog:

"What to do with extra money?" As in, what if you received X amount of money TODAY? It's good to make a list, or just think about it, right? Let's find out.

What if I had an extra $500?
-Refill EF, then rest to Murphy fund (goal for Murphy: $500)

What if I had an extra $1,000?
-Safe EF, full Murphy, rest to CC1. Draws "Loan2 only" time (time when I will only make min payments to Loan2 so I can start saving for my big move) to -2 months.

What if I had an extra $2,500?
-EF/Murphy taken care of, halved CC1! "L2only" -6 months

What if I had an extra $5,000?
-EF/Murphy/CC1 done! Hell-o double/extra Car Loan payments. This draws L2only 9 months closer. Wow!

What if I had an extra $7,500?
-EF/Murphy/CC1, out of my way! Car Loan, say your prayers with your 5 months left to live! I'm looking at you, CC2 and Student Loan 1! Better start hiding! This puts us at... wait for it... wait for it... L2only -12 months. That's right. That cuts down a whole year.

What if I had an extra $10,000 or more?
Just for the kicks... $10k means... CC1? Oh, so gone. Car loan? A month left to live. L2only -15 months. That means I could be debt free in 9 months vs. 24. Holy flipping wow. Heh.

But this is beyond "Loan2 only" dates. I would half all of the upcoming money towards saving and Loan2. Which would make Loan2 fully payable in... 3.1 years/34mo vs 6.25 years/75mo (if I only did min payments, not that I will or would!) So it essentially cuts it in half, and I'd be debt free well before move in date. Furthermore, if I DO half the savings into this L2, I'd still come $7,500 ahead, when move in date comes... but check this out. If I make the min payments on L2 and save save save... well, I am $14,750 ahead! Math's a bit off, but pretty close to that.

Ah, phew. How nice would that be? Well, that was a very fun exercise, wasnt it!

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