What to pay first?

iVillage Member
Registered: 10-16-2007
What to pay first?
11
Thu, 02-19-2009 - 8:11am

Ok so I will be getting my tax return next friday and my plan is to pay things off with it. My federal is going to be $4750 and my state $1153 so all together it will be about $5900. $1800 of that is going to my property tax and I really don't know which credit cards to pay off with the rest. So I need some opinions, here goes.

Card #1 $1605 @ 22.90% monthly payment $105
Card #2 $5896.67 @ 9.24% monthly payment $100
Card #3 $ 2540.11 broken down as follows $1127.78 @ 18.90%, $1165.72 @ 11.90%, and $238.40 @ 1.99% monthly payment $65.00
Card #4 1968.33 @ 0% until Jan 2010 monthly payment $19.00
Card #5 1080.84 @ 21.90%
Card #6 438.17 @ 22.99%
Card #7 1072.44 @ 0% for 6 months (expires in June)

So what does everyone think? SHould I go with the smallest amounts or the highest rates?
Thanks for any ideas. Liz


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iVillage Member
Registered: 01-23-2007
Thu, 02-19-2009 - 8:39am

Start with the highest rates and pay those off first. This will take a nice chunk out of your debt paying efforts.

Good for you!

Dee









iVillage Member
Registered: 08-24-2007
Thu, 02-19-2009 - 8:46am

Admittedly, I'm likely not as knowledgable as the others on the board, but I thought I'd add my 2 cents.


Experience has taught me that the $1,000 emergency fund is a Godsend.

Kate


empty purse

iVillage Member
Registered: 02-13-2009
Thu, 02-19-2009 - 8:51am

I am going to just throw this out here so here it goes.

Pay off card #1,5,6 & put $975.99 on c # 7 and that should leave you with a balanced owed on card #7 of $96.80 (which you could pay off really fast before June)

I am not a financial expert so maybe others would have a better way to go. There is a safety in a multitude of counselors so don't take my word for it! I might go this way if it were me!

Good success to you in using this money wisely! You can do it!

~~Maggie~~

iVillage Member
Registered: 04-10-2003
Thu, 02-19-2009 - 8:52am

Okay, so if I calculated this correctly, you will have $4100 to put towards debt reduction (yay you!!!)


So my plan of attack would be as follows:


Pay off card #1 (1605), #5 (1080.84) and # 6 (438.17). The total amounts to 3123.84 leaving you with $976.16


You didn't list a monthly payment for 5 and 6, but my guess would be about $150 for both? This frees up $250 a month, including the minimum for card 1


Bex -

iVillage Member
Registered: 02-13-2009
Thu, 02-19-2009 - 8:56am

Oh silly me! I did notice that you haven't fully funded your E Fund. I would suggest you fully fund that first and then possibly do what I suggested. The numbers may come out slightly different though ( you can decide better). Having a fully funded emergency fund would definitely keep you away from using those cc's for further purchases!

~~Maggie~~

iVillage Member
Registered: 10-16-2007
Thu, 02-19-2009 - 8:58am
Card 7 will go up to 22.90% in June. I am definately going to pay card 1,5,6, put some cash into my efund and then I will prob. pay card #7. Then when all those are paid that will free up about $250 to $300 a month which I can then put on the highest balance cards. It feels so good that I can finally start paying some of this stuff down.

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iVillage Member
Registered: 04-10-2003
Thu, 02-19-2009 - 9:07am

I think you just solved your problem!!!


Pay 1,5 and 6 (savings of $250 a month you said?)


Fund efund (it will take most of the extra but boy will you be happy you have it when your dryer stops working and you have to call a professional to come clean it


Bex -

iVillage Member
Registered: 11-17-2007
Thu, 02-19-2009 - 9:30am

Do Card 1, card 6 and card 3


Then go into payroll and lower your take out for taxes. No good reason to lend the feds money at 0% for a year while you could be making/saving 22% on the same money.


Best of luck to you.


Mary Ann


iVillage Member
Registered: 10-01-2008
Thu, 02-19-2009 - 10:39am

Pay 1, 5 6, & most of 7.

Norma


"Patience is the best remedy for every trouble"- Plautus


iVillage Member
Registered: 10-01-2008
Thu, 02-19-2009 - 10:52am

Your sooooooo smart!

Norma


"Patience is the best remedy for every trouble"- Plautus


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