Paying off all debt as fast as possible isn't always good advice. Depends on the interest rate, repayment terms, and what else you could be doing with your money. Those are non-trivial, and in the end, accelerating debt payment could cost you a lot of money.
I was talking with a 24-year-old guy the other day. He's about to ask his girlfriend to marry him and said that he doesn't want to buy a house until he can pay for it 100% in cash. He has some money saved, probably enough to put 20% plus down. My strong advice to him was to put 20 to 30% down on a house right now and buy it with a fixed 30 year mortgage. Money is about as cheap as it will ever get right now. He could get a mortgage for less than 4% and the money that he would put into the house, if he is smart could see returns north of 6% in various mutual funds and other investment modalities. So, sometimes incurring a debt in order to float your money elsewhere is a smart move.
I'm loving the ideas in this thread. I'm now trying to reconcile the fact that I want to make a reasonable amount of money, but the career path I'm considering would leave me broke. I'm really activated by the idea of expanding service opportunities to young people, in some sort of supervisory or administrative support role. I think service is important, but a public servant doesn't make all that much, at least not historically.
Exactly. One has to trust the math. Consult a financial expert if you don't understand interest. Math doesn't lie, and debt isn't evil. We've been led to believe it is, because so many people got so royally fucked in 07-08. But in the end, if you do solid research, and abide by tried and true investment principles (history is still a thing, and it's a bit longer than seven years), then you shouldn't worry about your debt load as just a number. It's not a moral issue.
Average rate of return for investments: safe to assume 3-6% Average interest rate of all my debts: way above that Prepayment penalties? None. -Not sure about car, but none on CCs, none on student loans I think I'm generally pretty safe. My debt is mostly student loans at 6.8% and credit cards in the range of 12-18%. Not sure about the car note, but that's the last one I'm worried about.
Ours cost $1500. It was dope. We held it out on an island, invited 13 people, paid for dinner for everybody and then had a potluck reception two weeks later at my uncle's house (he's got 5 acres of park-like land). Not sure about your deposits, but you can reef back on that shit.
Our stories start out similar, then diverge drastically. Going to Maui on Thanksgiving (even that was a compromise to my family; I wanted Koh Samui or maybe even the Maldives--somewhere nobody would follow). 15 friends and family are joining us. Maui isn't cheap, but, hey, 15 people isn't that many. Even at $200 a plate, you're not too deep. Then comes the fun part. We said, "Hey, we'll have a party sometime after we come back." Once our moms got hold of that idea it was a completely transformed into a fucking nightmare regular old straight up wedding reception, thus completely and utterly ruining the whole idea behind going to a far off place where only the loyalists would attend. So, while you're technically right that I can get out of this bullshit and only lose my $1000 deposit, I'd never live it down. It's written in goddam blood. There are many times that I'm appreciative that I have a large, close-knit and supportive family. This is a rare exception.
Yeah. That's always been an intellectual problem I've faced with the whole thing. I'd much, much rather have the down payment on a house than a wedding, and they generally seem to cost about the same - though of course both can run high, depending on the house and/or wedding.
I'm on track to spend about $20k of my own money, and about $15k of my parents' and in-laws' money. It's ridiculous. No other way to put it. It'll be fun though, and of course you feel grateful that all these people want to support you. It's definitely about more than finance, but the money alone can give you a heart attack.
Damn, that's fucking brutal. My IRA is at 7.5% right now and I was bitching to the credit card when it was at ten and a quarter. The last loan we got on a car, the loan officer at the bank was physically pissed off; the rate we were offered ensured that the bank would be making $475 in total towards the purchase of a new Honda Fit. I think the rate was under 2%. Sometimes it's good to be a fogey.
And my credit score isn't bad, to boot. I have one delinquent record on it from a bank of all things, and I can't wait when that fucker drops off in another year or two. Every other bill I've ever had I have always paid early/extra/on time. I might get a lower rate if I called and asked - but I don't want a fucking lower rate. It'll only apply to new purchases anyway. I want no more debt.
I paid off a credit card on February 13, 2007. February 14 I got laid off from my job. Then I had to run the card back up again to establish another life in LA while putting my wife through college in Seattle... paid it off again just a couple months ago, but not without some serious trepidation. Figured it was entirely possible I'd lose my good gig yet again. I was actually relieved when the annual fee kicked in a day before the payoff went through, thereby giving me a balance of $69. Damn right I waited until the gig was done for the year before I paid it off completely. When the universe sends you signals like that...