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Pondering really scary goal

December 4th, 2007 at 07:11 pm

Things have been going so well recently debtwise that I'm really itching to start investing and saving. I know I will probably have some expensive life changes in the next 10 years (possibly moving to England, possibly trying to have kids), and currently I have nothing in savings. My only "investments" are our two homes (neither of which are near paid for) and our various retirement funds.

I honestly never thought about saving for the long-term because I couldn't even imagine how I was going to get past all my debt. But now there's a greater income flow and my new disciplined approach to budgeting--the future is getting slightly brighter.

When I look at my debt, while I want to eventually get rid of the mortgages and student loans, what really bugs me is the consumer and personal debt. To date, that totals about $63K. Plus $7K that I still owe my dad for the down payment on my condo. (I think I'm going to move that to the "personal" category instead of the "home" category, because I want it to bug me more so I'll pay it off.)

If I keep to my current repayment plan, I should be able to pay all that off in a little less than three years. But part of me wants to push myself even more. We're expecting some pay increases; credit card monthly bills will go down gradually; expenses shouldn't increase much at all the next couple years. I'm wondering if I can make a goal to get rid of all consumer and personal debt in two years instead of three.

That would mean coming up with, on average, $900 more per month to put toward principal. Clearly I won't have that much even with pay raises, but I wonder if, by snowballing payments, I could actually do it.

I don't want to commit myself to the goal if I'm bound to fail, but I suppose even if I got closer as a result of trying it would be an accomplishment.

Still waffling...

2 Responses to “Pondering really scary goal”

  1. Broken Arrow Says:
    1196866980

    Wellll....

    I haven't turned to taxable investing myself, if that helps any. I've got ants in my pants to do it, but it just doesn't make financial sense for me right now. That's not to say that I think you should or shouldn't. Rather, I do think there's a time and place for it, but only when you feel that you are good and ready. Therefore, if you have any doubts, I say don't worry about.

    Debt reduction (especially if it's high interest and non-deductible) is still a great way to still increase your financial health. There may be exceptions (such as 401k), but overall, it's practically guaranteed!

  2. ceejay74 Says:
    1196869794

    I agree, BA--first that credit and personal debt goes. None of the interest rates are too bad, but it's ridiculous that so much of my income goes toward paying for past purchases, many of which I can't even remember. For my own mental health, I need to get out from under that.

    So for the next two years at least, I won't have to think about how or where I'm going to invest.

    Would you consider going to a financial planner when you're ready to invest, or are you going to self-educate on the options and make your own decisions?

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