Getting out and debt and SAVING

[peterj]

wow who would ever know that not spending would feel better than spending!!! i was payed over a week ago, and i have not spent 1 dollar on anything, i have planned from previous pays so i always ahead. I had a phone that was costing me a fortune so i payed that outright and got rid of that, got one more thing to get rid of around $1000 and all i will have is my car loan which is only 400 a month, i feel so good about it all, i see a bright future ahead, i was also with a girl who was costing me a fortune, i ended that relationship and i feel i now have time to save and set up my future. just wanted to say how this forum has helped

[peterj]

sorry i would like to add a question, my car loan is currently $12,000 Au, now i am going to uni next year and my plan was to have a total savings of around 14,000 between now and then. Now i am thinking is it better to pay the car loan off or keep the savings and keep paying the repayments??

[Seeker]

You haven't really provided enough info....

Your auto payment is $400/month and you owe $12,000... so in 30 more months it will be gone with just that info provided, if you continue to pay just as payments dictate.

But without an idea of your income and expenses.... and what amount is left over each month.... we cannot advise you. Are you planning on working while going to the University as well?

If you want a savings of $14,000 before next year (it's a big year, when exactly does your Uni start?), how much per month can you save?

In order to set goals and timeframes for accomplishing those goals, we'd need a idea of the spare $'s per month, as well as the number of months for each of your goals.

[peterj]

hey i will be saving 1,700 a month

income monthly is 2500

i mean like i dont want 14 grand but even 10 or so would be great

[maat55]

I would consider selling the car and buying a 4 to 5k car. All you need is reliable transportation and no debt.

How upside down are you?

[ukey]

u seem to be in pretty good position to meet your goals of $14k savings with $1.7k a month.

I don't suggest paying up the car loan first, until you meet your goal of $26k cash, and pay up your car loan then if you realli want to.

Unless you have more information on your expenses that is.

[snafu]

What is the interest rate on your car loan? In the USA some cost of credit [interest] has some tax benefit. Do you have any benefit in OZ?

[Seeker]

hey i will be saving 1,700 a month

income monthly is 2500

i mean like i dont want 14 grand but even 10 or so would be great

If you can save $1700 per month, then I'd probably do the following given the next 8 months for your immediate two goals.... if you want to keep the car and have some money for Uni come Jan 2010:

Pay $700 on you car for 8 months (until the end of the year)... and the $5600 paid will be pretty close to mostly complete.

Save $1000 for 8 months (until the end of the year)... and you'll have $8000 for Uni.

All of this is assuming that your education starts January of 2010. If you have more time, then you can get closer to both goals. And if you can work extra hours or get a second income going, then you'd be closer still.