This post is mostly a question about where the best use of this money would be.
I'm a US citizen living in Switzerland, married to a Swiss citizen. We're about 40K in debt, including car, my student loans, a personal family loan, and our combined credit cards. We've started taking the Dave Ramsey approach and start with our first $1000 in the bank, then work on paying off the debts, smallest to largest. We're making decent progress. We're going to be able to save about $500-$1000 per month, after all payments and food, fuel, etc. We also have about ~$1000 in value of precious metals on-hand.
Thats all to say that my wifes work is offering to us a $20,000 get-out-of-debt loan, with a whopping 0% interest. $400 gets taken out of her paycheck per month for 20 months, then $800 a month for 15 months. The company is a publicly-funded, yet semi-private organization. It bewilders me that any company would offer something like this without any interest (pun) of getting a financial return. My wife says is a Swiss thing - the company values good work from their employees more than money. They'd rather have out-of-debt employees that are in-turn happier and can do a better job than the alternative. Even with the $400 a month removed from her paycheck, we can still add money to our savings.
Our debts, in order from smallest to largest.
- Credit Card #1 - $1,812.37 - 23.65% interest - Min Monthly $68
- Credit Card #2 - $2,791.48 - 23.40% interest - Min Monthly $89
- Credit Card #3 - $5,721.50 - 9.9% interest - Min Monthly $300
- Student Loan #1 - $1,592.09 - 5.6% interest [Forbearance]
- Student Loan #2 - $2,032.03 - 6.8% interest [Forbearance]
- Student Loan #3 - $3,217.72 - 6.0% interest [Forbearance]
- Personal Family Loan - $10,000 - 0% interest, just potential strife if not repaid soonish
- Car Lease - $12,704.45 - 3.8% interest - Monthly $429
We have exactly $1,000 in the savings account. Our initial plan was to completely knock out Credit Card #1 and #2, as they are the highest interest rates, and smallest amounts. We plan to put $3,000 onto card #3, which should half the minimum monthly payment to around ~$150 per month - but we still plan to pay ~$300 to pay the balance sooner. We had no intention of putting any money onto my student loans, as they are in forbearance, and we make no monthly payment on them. We planned to put another $2,000 onto the Personal Family loan, and keep the rest of the cash as a bigger emergency fund - if something comes up, like the transmission on the car goes, I don't want to end up putting things on the card(s) again.
How would you do this differently? I'm hoping to get a few other perspectives on how to use a windfall like this. I'm worried that we have no real plan to pay the student loans in the next 3-ish years as long as I can still get the forbearance (aware that interest is still accruing).
EDIT: My wife has a very established retirement account with about $60,000 funded already. Its taken from her paycheck already, and employer matched.
Submitted May 17, 2017 at 08:29AM by zreofiregs http://ift.tt/2qRiOrj
