Originally posted by jpg7n16
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Should I save my money or pay off my loan?
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Last edited by DebtFree&Broke; 05-14-2012, 02:50 PM.
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Originally posted by DebtFree&Broke View PostThat wasn't me who asked when to stop contributing to retirement.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.
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Originally posted by DebtFree&Broke View PostI still say pay off the car first. When your budget is tight you have to focus on cash flow or you won't build your net worth.
So neither answer is wrong. It just depends on the situation.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.
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Personally, I would not be prepaying the SLs or car note with a single cent unless I was putting at least 10% of my gross away into retirement account(s). If you aren't doing at least that much, then you don't have any extra money.
Since you are self-employed, look into a solo 401k or Simple IRA. Avoid expensive custodians as the fees will choke the life out of your money. Stick with Vanguard, Fidelity, or T Rowe Price. Also consider a Roth for some of your retirement money.
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Originally posted by disneysteve View Postjpg is right mathematically. DebtFree may be right from a practical standpoint. Paying the highest interest debt first will always save you the most money in the long run. The issue is if your situation allows you to plan that far ahead. If you are struggling or living paycheck to paycheck, it can make sense procedurally to knock out a small debt or two in order to improve cash flow and give you some breathing room in your budget. Yes, it has a long term cost in terms of total interest paid over the life of the loans, but it can make things much easier to deal with sooner rather than later. That can have an added emotional advantage which is tough to put a price on.
So neither answer is wrong. It just depends on the situation.
I don't know that this little radish applies to the OP, but I think it does apply often. I know that back when I was in consumer debt hell, eliminating an obligation was a huge, huge deal to me.
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Originally posted by Petunia 100 View PostHaving a few less things to juggle can make a big difference in both cash flow and stress.Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.
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Originally posted by chase.woodland@yahoo.com View Postyou talked about 10-15% for retirement ... is that 10-15% of each months income? So it sounds like, my goal is to save for now, and only until I reach a specific point, should i start paying down the principal on my student loan ahead of schedule...correct? How many months of saving 10-15% for retirement do you suggest I put away before starting on the student loan extra payments?
Thank you!
I would much rather watch you build up long term investments earning 7-11% rather than pay down loans costing 2-3%.
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Originally posted by disneysteve View PostSince the fixed rate on your loans is fairly low, over the long term, you would do better statistically by investing your money since the long term return of stocks is in the 10-12% range.
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Originally posted by chase.woodland@yahoo.com View PostI know it isnt actually a stock investment --- but, what are your thoughts on a long term investment in an S&P 500 Index Fund?Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.
Comment
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Originally posted by chase.woodland@yahoo.com View Postis an S&P 500 Index Fund something you would recomend...or would you suggest a different direction?Steve
* Despite the high cost of living, it remains very popular.
* Why should I pay for my daughter's education when she already knows everything?
* There are no shortcuts to anywhere worth going.
Comment
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Originally posted by Petunia 100 View PostPersonally, I would not be prepaying the SLs or car note with a single cent unless I was putting at least 10% of my gross away into retirement account(s). If you aren't doing at least that much, then you don't have any extra money.
Since you are self-employed, look into a solo 401k or Simple IRA. Avoid expensive custodians as the fees will choke the life out of your money. Stick with Vanguard, Fidelity, or T Rowe Price. Also consider a Roth for some of your retirement money.
Are you saying I should start paying the SL and/or Car loan off quicker once I am putting 10% away? or do you still suggest paying the Min ammounts and using that money for other investments/savings/etc?
Thanks!
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