Saturday, August 11, 2012

Second part of a plan


Alright, as mentioned on my last post about my secret soon-to-be $2000 fund... I have to explain why I decided to come clean all of a sudden. First, because I think it's silly to hide stuff from myself, and from you guys. You're all awesome and give great advice. Also, sorry about not responding to yesterday's comments. I'll get to them tonight after work.

Second reason why I am bringing this to the light, because as you can see, the car loan is coming to its expiration point. By November, it should have close to $2200 left to be paid. This loan is averaging about $60 in interest every month. I don't quite get how it is calculated, since the interest rate varies wildly. I am not on the loan, or related to it whatsoever (it is my older brother and father's), so nobody will explain this to me. The percentage is taken out of the payment and not the principal. It is sometimes higher, sometimes lower, but still averaging $60/mo.

So here's an idea I came up with... taking the $2000 plus the regular car payment for November ($410) and sending them off to fully pay off the car. That will wipe out "my" first debt! (Even though it's not mine or related to me at all!) I am not sure what everyone's position is on paying things early to avoid all the extra interest.

The plan is only halfway done at this point, though. I will continue to pay myself $410/mo for the next 6 months (as if I still had the car payment), until the date when the car was supposed to be fully paid off, which is May 2013.

Benefits of this? I get to keep about $420 worth of interest over the final 6 months of this loan. Put in $2000, get out $2420 after 6 months. That's better than most investments I can think of! The extra money can probably be used to accelerate my debt snowballs, or complete my EF.

So what do you think? Should I tempt faith once again with my hidden funds and save quite a lot of interest, or throw them into a CD to be 'forever' forgotten for another 3 years?

8 comments:

  1. I think...you shouldn't even pay that car loan! In fact, THEY should pay you BACK for the fact that you paid off THEIR loan! I'm absolutely disgusted right now, and I know it's not your fault. Your family is HORRIBLE.

    Let THEM pay for THEIR car. Give them a little taste of what a hardship having them as family members has been when you cut them off--completely. You don't owe them a thing. Make it a mantra: you don't owe them ANYTHING. You owe it to yourself, however, to get as far away from them as possible. Please get away from them.

    Honestly I think you should use the money to move to somewhere where they don't know where you live, and tell them to go fuck themselves when they ask you to pay the rest of the loan. They are ALL adults. Let them act like it for once.

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    1. As I've mentioned before, I am working on moving far, far away... in 3 years. It is a big jump and I intend to be fully debt free and with enough of a cushion that I can survive massive failures. I am going to pay the loan, but that is the last of their bills I will be periodically paying. I am sorry this stresses you so, but they're already in enough hardship thanks to their lack of financial control, and I wont be investing any more time in that, if that gives you any relief.

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    2. It just makes me sad to see others get treated the way I've been treated. I don't know how you can just let them treat you this way, and neither can anyone else who reads this blog. Yes, it really does upset me. You're an adult. You're not a child anymore. You can just leave.

      I guess I don't understand the mentality. I hate my mother and I wouldn't give her anything. When I leave, I'm leaving for good.

      Aren't you paying the credit cards? those are your mom's doing. Technically it's yours, but it's really hers. So the car loan isn't the last.

      I don't feel sorry for them one bit and neither should you. I feel that by paying their bills, you're only showing them that they can come after you again when they run out of money.

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  2. Putting aside the family issues and that you shouldn't even have to pay this car loan....

    I think it is great to pay it off, and keep saving the $410 a month. But why not just add it to the next debt (as in the snowball) right away?

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    1. Because I want to rebuild the $2000. I am not sure what it is about these $2000, but I really want them whole and somewhere. This would just be another loan from my self to myself to save a bit in interest. After the car is paid (with or without said loan), the money will go straight to my snowballs. Watch out bills, for when that time comes!

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  3. My advice would be to put it in your Emergency Fund - as I see from your side bar, it is sitting at zero right now. With your family's track record, I'm sure you might need it over the next 6 months.

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    1. I'll be working on my EF as soon as that due is met.

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  4. I'd pay it off. The savings on the interest is great.

    Virginia

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