Saturday, January 2, 2010
Examining Finances
Paid bills last night and took a good, hard look at the finances. My goal is to pay off debt and replenish savings in an 18 month period. Divorce is hard on finances--going from 2 incomes, down to 1 with basically the same expenses, not to mention all the lawyer bills. I think I can do it. I have developed a debt repayment plan that will have my miscellaneous bills paid off in 10 months---or by Oct 2010. That will leave me with my mortgage and the largest of 3 student loans. Part of the plan involves paying off the smaller two student loans, and then applying that payment amount to the principle of the big student loan. We'll see. Also, I get paid 2 times a month. If I can set aside roughly a THIRD of each check for savings, then, after 18 months, I will have replenished my savings that I had prior to my marriage being in trouble. This is where it will get tricky--I'm basically reducing my income by a third. It's going to be tight, but I will try. I'll have to pull out some of my old tightwad tricks.
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Sounds like you are on the right track with the student loan repayment plan. I like to listen to Suze Orman, Clark Howard and Dave Ramsey and all of the other financial gurus. From what I have always heard, for any kind of credit debt, is to pay off the highest interest rate debt first, paying the minimum on the others, then take the payment from the that one and apply to the others, etc. My son and daughter-in-law took the Dave Ramsey Financial Peace University course at church and they have been able to pay their bills, tithe, save, and open an IRA during the seven months they have been married. Also, as Suze says, IF you ever have to file bankruptcy, student loans still have to be paid and should always come first in any debt repayment plan. Just my thoughts.
ReplyDeleteAll good advice. I've heard good things about Dave Ramsey--I get podcasts of a faith-based financial program called "money matters" and i *think* it is Dave Ramsey. for me, my students loans have a low interest rate, and at this point the interest is tax deductible. But you are right, they still must be repaid regardless of bankruptcy. Good for your son and wife!
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