|
No, you don't need to pay off your house or student loan. Those debts are relatively 'good' debts since a)you can deduct the interest paid if you are paying enough to itemize your taxes, b)at least in the case of the mortgage you likely have a pretty decent interest rate. Questionable on the truck, what is your interest rate on that loan, are you underwater on the truck's value vs. the loan amount? Honestly, I'd never borrow money to buy a car. I know that is not everyone's solution, but borrowing money to purchase a depreciating asset is a losing proposition. If you aren't too much underwater with the loan and you really want to consider saving a lot of money, you might consider selling your truck and buying a lower cost, reliable vehicle. Cheaper to own with no payment, cheaper to insure, maybe lower gas mileage. I realize this might draw some criticism as some people are absolutely married to their vehicle, but I thought I'd throw it out there.
Take that 15K and make sure that it is earning SOME kind of return. If it has to be totally safe and secure and relatively liquid, set it up into a CD ladder with INGDirect or some other online bank. If you haven't heard of a CD ladder it just means to divide the money into chunks and invest it over time so that you have a certain amount maturing each set period of time. You could take your $15K and divide it into $1.25K chunks and then buy a 12 month CD each month for the next 12 months. Then next year, you just roll the CD over into another 12 month CD. This method allows your money to be totally secure, while still maximizing your return, and making sure that you have money coming out each month if you need it.
You might also take a look at your finances to see what can be trimmed. Netflix might be replaced by a streaming site like Hulu since already have free internet, etc. Movies are also available for download via torrent, etc. depending on how concerned you are about broadcast rights, copyright etc. I'm not trying to make any judgments here, just offering suggestions about how you might trim your expenses. Cut one or both of Costco and Sam's. I doubt that you really need both of those places. You know better than me what you get there, but I find them to be pretty overlapping in what they offer.
The other area that sticks out to me is your car payment and insurance. $570 per month seems pretty high to me. I don't know how much of this is loan payment and how much is insurance. If you haven't shopped for insurance in a while, you might check around and see if you can't get a better rate. You are a homeowner, and 25, so you have 2 out of 3 of the big things the insurance companies look for, the other being marriage, when determining your rate. Ask your current insurer and any company you call for quotes about discounts for homeownership, for bundling your home insurance and auto-insurance, for raising your deductible from $250 to $500, etc. The last one can be a bigger difference than you think. Realistically, you aren't going to want to get insurance involved if the accident is under $500 damage anyway, since your rates are almost guaranteed to go up if you do.
---------- Post added at 02:41 PM ---------- Previous post was at 02:35 PM ----------
Ouch on the truck. That is a huge expense. I am sure that you love it, but ouch. At least the loan is not really that high of an interest rate.
The mortgage isn't too high either, maybe a bit above market. You could certainly make some calls around to see what rates and payments you could get elsewhere. You can usually do a preliminary talk through without incurring any obligation or expense. Bankrate.com has the national average mortgage for 30-year fixed at 5.25 right now. So that wouldn't likely be worth it.
Don't apologize for your questions. People love to help. Or they'll not be interested and move on.
__________________
---
You do not really understand something unless you can explain it to your grandmother.
- Albert Einstein
---
|