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Home > Once a bug hits me...

Once a bug hits me...

June 11th, 2009 at 01:57 pm

...it's hard to fend off! I feel like I'm writing way too many blog posts, but I'm just so full of energy lately. My chronic condition is nearly healed up and hopefully going away for good, and so I just feel more energized than I have since early March!

Anyway, the "bug" that's got into me is the debt payoff bug. I made a very sensible decision, I thought, to stop accelerating debt payments and start saving up money, and with AS's layoff and my and NT's furloughs, and no real job security in the near future, it still is the sensible thing to do.

But but but...if I'm able to transfer $2000 of my higher-interest personal loan balance to a lower-interest student loan debt, which won't come fully due until 2012, I'll be able to bring my personal loan balance to about $7817 by the end of the month.

After that, with regular payments and by adding $200 toward principal each month, I could have that paid off in 10 months. Thus eliminating my highest-interest debt, and thus freeing up $623 per month in the budget.

I was staring at that potential new balance, $7817, when a new thought struck me. I'd just been marveling over my new ability to squirrel money away, here and there, in little bits, for various future (potential and real) needs. I suddenly thought, I wonder how much I've really got, here in the U.S.? Because some I keep in savings, and some I keep in checking, and I think of it as separate little sums, not as a great big lump of money.

So I added it up. Wanna see? In checking, I've got (or will have by Monday, when payday hits):
$784.60 AS medical fund
$390.50 CJ/NT medical fund
$80 for future (Feb.) home insurance bill
$21 for future (Sept.) bus pass
$100 for future (July/Aug.) student loan interest payment
$725 for savings ($100 for EF, rest to vacation)

And in savings, I have:
$1,900.00 for vacation
$112.71 for home improvement
$2,954.39 for emergency/baby fund
$210.41 for NT textbooks
$240.00 for AS retirement (to be rolled into CD eventually.

That's $7518.61! Less than $300 short of what I'd need to pay off the personal loan next month.

If that were paid off, I'd have the $623 that used to go to that bill, plus $852 that goes to savings every month, for a total of $1475 per month. If I put that toward making up all the above totals, it would take me about 5 months.

Of course, then it would be December, and I wouldn't have Xmas gift money saved up because all the savings would be going to make up lost ground. And if another of us lost our job or got more furlough, we wouldn't be able to make it up nearly that fast. We would be left without a safety net for a couple months while we rebuilt savings, medical funds and future bill funds.

So I know it's probably not a good idea to totally drain my savings and start over. But still, would you be tempted to throw caution to the wind once the loan balance got down to that level and it was possible to get rid of it in one fell swoop?

6 Responses to “Once a bug hits me...”

  1. Joan.of.the.Arch Says:

    Nope, caution is needed especially because of the recession and unemployment threats. Keep plugging at it and putting aside money. The way you were already planning is very good.

  2. creditcardfree Says:

    I won't lie. I would definitely be tempted.

    Much of that money you need in the near future, so it isn't really available. I think your original plan is probably the way to go. However, I'd keep looking at it each month, because 5 months from now the loan will have a smaller balance and it may make more sense to pull from your savings as you get closer to the end of the loan.

  3. momcents Says:

    Ah yes ... the dangerous point ... when what one owes = what one has saved. I am at that point, too. I was tempted to pull the plug, until DH told me that there are the dreaded "consult and have a $0 owed, $0 saved equation. That was until DH informed me that the dreaded "consultants" are meeting with each dept. The last time this happened 1,200 were laid off.

    You are close, though. Even if you stick with your original plan.

  4. whitestripe Says:

    oh, i would definately be tempted. and i would probably look at my christmas present as being no debt. Big Grin but DF and I are like that, we don't really celebrate christmas that way.

    could you do it halfway? like, in 5 months instead of 10?

  5. shiela Says:

    I would go with the original plan too because of the uncertainty (I rather have some cash at hand for emergency). But it won't hurt to look at it again in few months time, you'll never know what your situation will be by then.

  6. ceejay74 Says:

    Thanks guys, I really needed someone to confirm that I'm right to keep this money for the time being. I was starting to have impulsive urges!

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