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Suggestions welcome: debt reduction vs. saving/investing

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  • creditcardfree
    replied
    I'll say congrats on the forum, too! Because you have done awesome paying down the debt.

    Leave a comment:


  • ea1776
    replied
    Originally posted by ceejay74 View Post
    I just had to update this ancient thread to report that I've paid off all the credit card debt, over $70,000!! What's more, we have over $10,000 in EF savings (up from $0) and have begun to consult lawyers and financial planners to make sure all of our financial affairs will make sense in the unlikely event of a breakup.

    Now on to student loan debt, and the many many other financial things (retirement, etc.) that badly need to be addressed.

    But first: woo hoo!!!

    Congrats! and thanks for creating this thread. I love it when people have a unique life setup. It makes for a mind-opening experience and definitely a good financial planning exercise too! Cheers.

    Leave a comment:


  • minnie1928
    replied
    Originally posted by ceejay74 View Post
    But first: woo hoo!!!
    Woo Hoo is right!! Congrats!!

    Leave a comment:


  • ceejay74
    replied
    I just had to update this ancient thread to report that I've paid off all the credit card debt, over $70,000!! What's more, we have over $10,000 in EF savings (up from $0) and have begun to consult lawyers and financial planners to make sure all of our financial affairs will make sense in the unlikely event of a breakup.

    Now on to student loan debt, and the many many other financial things (retirement, etc.) that badly need to be addressed.

    But first: woo hoo!!!

    Leave a comment:


  • ceejay74
    replied
    Originally posted by RedHotLama View Post
    I found a good snowball spread sheet. Although it may be difficult to calculate the extra charges for sending money.

    But basically pay off the highest interest first. You may also want to pay off those 0% ones before the time is up if you can, because if you dont they may tack on the interest once the time is up since you don't pay it all off.

    Heres snowball worksheet. need to remove spaces in w w w

    w w w .geocities.com/schizeckinosy/Snowball.html
    Cool! I took a look at it, and while it seems a bit complicated, it looks like a helpful tool and a good rainy-day activity sometime in the future! :-)

    Leave a comment:


  • TBH
    replied
    Originally posted by Scanner View Post
    Because. . .like I said, they aren't partners. They are "joint venturists."
    Then in your opinion, are married people are "joint venturists" too?

    Leave a comment:


  • hellodeli1
    replied
    Saving vs. Debt Reduction

    Um, saving and debt reduction are identical when you look at it from a bottom line fiscal standpoint. If you have debt that carries a higher interest rate than you can earn, paying down that debt saves you the money that you would have paid toward interest.

    Leave a comment:


  • Scanner
    replied
    I do think unmarried partners, if they have combined their finances, should definitely look at their net worth as a joint thing. Why wouldn't they?
    Because. . .like I said, they aren't partners. They are "joint venturists."

    They are sharing the house, the bedroom, the vacations, but they aren't partners.

    I don't have to tell you that many people here have probably lived with a spouse before getting married and realize that being married/partnering and living together are two entirely different balls of wax.

    Leave a comment:


  • TBH
    replied
    Originally posted by ceejay74 View Post
    Really, my situation makes a lot of sense, but it would take too much explaining here. I've got it figured out.
    CJ sounds very savvy, and I'm sure s/he is aware of the legal and financial and tax implications of being in an unmarried partnership.

    It's tough, but not impossible, for unmarried partners to navigate a system that only understands a very few kinds of domestic relationships--single, single parent, married with no kids, married with kids. It's ludicrous that legally I'm single, and my partner is single, and yet we live in the same house.

    My partner and I sprang for a lawyer who specialized in unmarried family law when we had our wills and powers of attorney done. But you don't have to do anything too special. You name each other in your wills. You give each other powers of attorney. You put some stuff in each person's name. Maybe you get a little extra life insurance because you may have to pay inheritance taxes where married folks wouldn't, and because you won't get your dead partner's social security. Other than that, you just work hard on your relationship like anybody else and have faith that you won't break up.

    I do think unmarried partners, if they have combined their finances, should definitely look at their net worth as a joint thing. Why wouldn't they?

    Leave a comment:


  • Seeker
    replied
    Ultimately, I think not a lot of people understand that while there are risks involved with this relationship, there are the same risks involved with the traditional "partner" (2-people) relationship.

    In a way, a three-person relationship would be less-devestated by one of the three losing work, becomine disabled, or leaving. Because they've then lost 33% instead of 50%. Can you see the advantage there?

    If one wins the lottery, they all do.

    I'm not a lawyer and do not "know" the real legal implications, but I could logically see the law treating this as a 33% division. These three have committed to each other; though it may not be on any legal document, common-law marriages are not documented either.

    Ceejay74 originally asked whether it would be best to save or to pay off these debts. The goal never changes, only the specifics change. The only specifics are the interest rates on the debts. So you start there.

    The basic goal is to pay off those debts that cost more than you can make by saving. So whatever rate you can earn by saving is what you need to determine.... you already know the interest rates that have to be paid.

    When your debt interest rate is the same or lower than what you can make by saving, then you have a choice -- continue to pay off the debt or start saving.

    That's all I can offer.

    Leave a comment:


  • ceejay74
    replied
    Thanks guys. Really, my situation makes a lot of sense, but it would take too much explaining here. I've got it figured out. Next time I need financial advice I'll just say I'm one person with a big income and an absolutely staggering amount of debt. :-) Or that we're a couple. I just needed advice on debt repayment vs. savings.

    Thanks again; on that front, I have a much clearer idea of how to proceed!
    CJ

    Leave a comment:


  • veronak
    replied
    I did the D. Ramsey plan first saved $1000 for EF and then worked on debts smallest to largest. Good luck

    Leave a comment:


  • Scanner
    replied
    Oops. Sorry. My bad.

    Leave a comment:


  • disneysteve
    replied
    Originally posted by Scanner View Post
    Of course, you are in the UK; I'm in the US. Things could be different there.
    OP's location is listed as Minneapolis. Last time I checked, that was part of the US.

    Leave a comment:


  • Scanner
    replied
    Probably in this cases of "partnering", it's best to not think of them as "partners" in the corporate sense (like a law firm or something).

    Really, it's 3 single people living together.

    Call it a "joint venture."

    He's handling the finances but really, that's probably not the best approach.

    Each adult should have his/her assets, be responsible for it, be educated on it and if there is a death, disability, seperation etc., have it laid out in his/her will, power of attorney, life insurance policy, etc. where assets are to be distributed if there is mutual affection and love circulating here.

    Expenses should be split, debts named in one name, and assets named in other names so on.

    It won't be a perfect 33% split on everything but I guess you do the best you can.

    Anyway, based on this, I think calculating a "joint net worth" is an illusion.

    I am not making moral judgement on your situation, just rather an amateur legal judgement.

    Of course, you are in the UK; I'm in the US. Things could be different there.

    Leave a comment:

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