My Third Paycheck of the Year
Ξ February 7th, 2008 | → | ∇ Debt Payments |
OK. I’ve finished all of my debt payments for this paycheck and I have the final results.
The first thing that I did was to replenish the EF from the $100 that I moved to checking to cover the front door repairs. Actually, I later moved another hundred over, just to be safe in case something auto-posted to my account. I didn’t want anything to bounce, so I parked an extra hundred dollars there as a buffer. I plan to put an extra hundred in the account sometime in the near future to keep a permanent buffer there.
But anyway, I brought my EF back up to a thousand dollars.
After that I made all of my minimum payments, and something bad happened. Something deferred posted to a CC and it raised my balance to higher than I started. So I actually am moving backward in my debt payoff. I now owe almost two hundred dollars higher than when I began. And that’s a bad feeling. The other thing that added to it is the transfer fees from moving the BofA account money around.
I’m good with it though. In the long run it will work out better this way, but in the short term I haven’t made any progress as far as the numbers are concerned. In effect, I bought the interest rate down on that account, but I will make out better as time passes.
Then I paid my car note. My balance has now broke through the nine thousand dollar mark. It may go back up through the nine thousand dollar mark over the course of the month though, as the monthly interest is calculated and added to the account, but as of right now, the payoff for my car is less than nine thousand.
After that I sat for a very long time and debated. I can pay off the student loans with the BofA account if I want to. But I also have a very nasty Air Conditioner payment coming out of six month deferment this month. If I don’t pay it off this month it will post the accrued interest and that’s about an extra five hundred dollars. So if I wanted, I could pay off the AC instead, and continue to pay the student loans with the Tax Refund Check and pay Sallie Mae off in the next couple of months. It was a very hard decision to make.
In the end, I decided to take the hit from the AC people and pay off Sallie Mae. It’s a five hundred dollar decision, and I didn’t take it lightly. But in the end it came down to cash flow. If I pay off the AC with the BofA, I will be adding a BofA payment to my already excessive student loan payment. If I pay off the student loans, I will be adding a payment for the AC, plus accrued interest, in addition to the BofA payment, but I will be losing a monthly payment of $888.00
I will still come out with a greater monthly payment in order to pay off the AC and the BofA in just a few months. Well, actually, I wouldn’t pay off the BofA that fast, because it will be at a low interest rate, so I will pay something else off instead. But I will pay off the AC with the accrued interest, by the end of March or so. It may be the first payday of April though. I haven’t done the math yet. But if something were to happen in the meantime, I would like to have the available cashflow to handle it. So even though from a strictly mathematical perspective it doesn’t make sense to pay off the student loans first, from a security standpoint, it makes a lot more sense. And that doesn’t even take into account that I really hate Sallie Mae. So in the end, I will take the accrued interest hit and get rid of Sallie Mae. Other people may have done it another way, but I’m satisfied with my decision at this point.
And that leaves me about $750 after taking out for living expenses to pay on my debt snowball. Valentines Day is coming up in a week, so I want to keep out a couple of hundred dollars to keep my wife for another year. So I want to send off about $550 to pay off debt. And this is where the decision making got very easy.
I really like Home Depot. I shop there for most of my home improvement supplies. When I needed a doorknob last week, that’s where I went. They have such a wonderful selection, great prices, and helpful sales people. It’s a great store.
But it’s a bad debt.
Home Depot:
Beginning Balance: $502.23
Today’s Payment: $502.23
New Balance: ZERO
Goodbye home depot. I appreciate you being there when I needed some emergency repairs. But from now on I will be paying cash.
(I also sent in my very last payment to Fry’s Electronics to cover the interest that had accrued prior to my final payment last time.)
So then I updated my sidebar, and as I expected, my CC balance has gone UP. That’s not the direction that it is supposed to be going. But that’s what happens if you are stupid enough to choose a deferred payment. But nevertheless, I have one less CC and I can pick myself up and dust myself off easy enough. The good news is that my overall debt balance is still lower than when I started, and it will go down even further next week when the payment that is auto-posted to the student loans credits to my account. But it sure will look funny when I transfer the student loans to the credit card and the CC balance is $7,600 more than when I started.
Next on the agenda is “Little Shopping” where I will get the small food items that need to be replenished in between the “Big Shopping” days. We need some bread, cereal, and little items like that. I don’t expect it to be too bad.
on February 7th, 2008 at 1:20 pm
Thank you for the update.
After reading your entry I just looked at your TOTAL debt amounts - and it looked better than last month - woohoo!