At our worst we had 30 bills a month and a total of $283,000 in debt in 2016. I was losing my mind. Today we have $28,742.73 in debt and only 11 bills a month. With $3,000 in savings. Income a year average $90,000 (we are part of union so they contribute to pension, annuity and health insurance from every check)
We sold our home and cars over the course of 2 years and moved out of state with better pay and benefits. We are left with two USAA loans:
$7,528.94 10.19% $255.38 monthly / payoff date 11/2020 $21,213.79 11.75% $586.11 monthly / payoff date 10/2021
This is totaling $841.49 a month. It's eating into our ability to save a month. The type of work is like being "self-employed" so there are off times about 3 months spread throughout the year with no income. We end up using savings to cover those months and then we start over.
This is how the whole debt thing spiraled years ago, we would use credit cards to cover the months of no income for bills and fun. -Side note for anyone recommending working during off times for extra income. There are requirements for keeping our insurance and the union is very small it would hurt us not help us. We can receive unemployment during those times it covers our expenses for the month just not the bills.
I've got a solid and tight budget with very little fun in there and it leaves nothing left over for a real emergency fund. I included the 3 months off in budget to make sure they were covered and we break even. I would like an emergency fund that we don't use for bills.
My thinking was contacting USAA and applying for a consolidation loan for $25,000 and using tax money to cover the $3,742 to pay off both loans and have a lower monthly note. Even if it's only saving me $300 a month it will allow me to put something in a savings that wouldn't be touched. Any extra money after that would be used to pay debt early.
Should I just continue to pay the loans monthly until payoff date, or should I consolidate them to lower monthly payment to save (these loans range from 3-5 year payoff date)? Appreciate your time and response.
Submitted January 24, 2018 at 07:31AM by leedle321 http://ift.tt/2n7DLtu
