Hello PF:
I recently graduated school this past May with quite a bit of student, credit card, and auto loan debt. I'm slowly digging my way out now that I'm working and have made considerable progress since June. About $10k paid down in total across all debts.
Here's a breakdown of my remaining debt:
- CCs (0% for another year or so): $7,200
- Auto Loan (4.315% w/ 4 years remaining): $18.1k (on a car worth about $15k)
- Private Student Loans (5-9%): ~$23k
- Gov Student loans (3-5%): ~$30k
My income is $68k a year. I put 6% into a 401k with 50% matching. That leaves me, after health/dental/disability insurance, with about $3,700/month, take home.
My current monthly expenses look like this:
- Rent - $700
- Car Payment - $400
- Car Insurance - $137
- Cell Phone Plan - $43
- Cell Phone Payment - $37
- Internet & Cable - $170
- Dollar Shave Club - $3
- Renters Insurance - $17
- Gov Student Loans - $117
- Private Student Loans - $342 (soon to be refinanced over a longer term)
- iCloud Storage - $3
- Utilities - $125
I keep $1000 in my savings for a small emergency fund and put $650 a month into the account. Anything over $1000 in my savings I use to make large payments towards my credit cards. This method works well for me and I've been able to pay about $650 a month towards debt.
I also put about $1000 into a flex account each month. This pays for all things not covered above. Gas, groceries, going out, eating out, coffee, etc. If I ever go over this, I take the money from savings so it hurts more. I've been ok at staying in my limits.
My question:
I am getting $5000 for my tax refund this year. A few options I'm considering:
- Paying all $5000 towards my auto loan and refinancing $13k over 3 years at 1.99% with my credit union
- Selling my car for $15k, using $3000 from my refund to pay off the loan. Then buying an $8k car, financing over 2 years @ 1.99% paying $320 a month. Using the remaining $2000 to put another dent in my credit cards.
- Using all $5000 to nearly eliminate my cc debt. Finish them off in a few months, then take the money I was putting towards ccs and pay down car loan quickly.
No matter what I will continue taking that additional money each month and apply it towards debt. My boyfriend is moving in with me in 5 months and that will cut my expenses down quite dramatically. I am on track to be out of debt in not too long of time, barring student debt, which I have not decided whether or not to pay off quickly or not.
Please, let me know your thoughts.
Submitted January 30, 2017 at 10:55AM by devinclark http://ift.tt/2jKTG0A
