Monday, June 13, 2011

Decisions, Decisions

Okay, dear readers, it is time for you to vote. Not for a political office, nor for something really important like a reality TV dancing competition. No, for what I shall do with my extra funds when my car is paid off (saving $500/month) and BF moves in (saving $450/month).

Starting in August I will have approximately $950 more dollars per month at my disposal. Which will be AMAZING. I am giving myself permission to use the money in August for my Chicago trip as well as some back to school shopping, since I rarely go big on the shopping. But in September I want to have a plan for that money so it doesn't slip through my fingers.

Below are three ideas I have for how to handle the money. Please vote on your favorite and tell me why. Then, I'll add them all up and probably do whatever I want anyway. But if you make an excellent point I might listen. And credit your brilliance for changing my life. Okay, onto the plans!

Plan A
*Save $500 per month in savings, not earmarked for anything specific. Just save for whatever future events/expenses may come.
*Put an extra $450 toward my student loan, which is my last remaining debt. It does have incredibly low interest though.

Plan B
*$100/month in car fund (for repairs and eventually a new car)
*$100/month in a travel fund (I like to go places)
*$100/month in computer fund (for whenever my laptop of five years crashes or to eventually buy a desktop with BF)
*$400/month toward wedding fund (I'm not engaged but it's being talked about). This could also become house down payment fund, depending on what the future holds.
*$250/month toward student loans

Plan C
*$950/month toward student loans. This would have them paid off in a year, though if I use tax returns for the debt I could definitely have it done in a 10 months, most likely less than that!

I am leaning toward plan B, because it makes progress on several goals that I have for myself. Also, any unbudgeted funds (which have been my car snowflakes) could go toward student loans, so even though I'd only be adding $200 more dollars per month officially, it could definitely be more than that.

The appeal of Plan C is being able to say I'm 100% debt free by September of 2012 (at the latest). Though, BF has student loans and a car payment, and if wedding bells are in the future, I'll just take on his debt at that point. And if wedding bells do occur, I'd have to sidetrack that plan to pay for said nuptials.

Cast your ballots now! Standard text messaging rates apply. You may only vote once a day. Watch for dangling chads. Don't swim half an hour after eating.


  1. Wow, your car payment is high! But congrats on paying it off soon!! We just paid mine off this year and it feels SO GOOD not to have that.
    Anyway, I vote for B, mostly for the down payment. I wouldn't stress about your student loans too much because of the low interest rate and the fact that they are actually "good debt" to have. As good as debt can be, anyway!

  2. Where is your emergency fund line? I'd vote option B if these are my only choices but I think you should be adding to your emergency fund to get to that 3-6 months of expenses, especially if you get another pink slip next year that sticks! Congrats on (almost) paying off your car! Isn't it fun to "dream" about what to do with all your "extra" money!?!

  3. I'm a fickle sort of person, so I suggest a hybrid. Maybe start a student loan "sinking fund" so when you get the urge to be debt free one day, you'll have a few thousand sitting there to throw at that debt. Also, I suggest starting a Roth IRA and using some of your extra cash to fund that. I use my Roth as my emergency fund, because you can pull your contributions out at any time and only lose whatever investment load fees the fund required. Finally, take the rest and use it for a combination fun/routine expense fund.

  4. I'm for option A. You can save for a general fund, and if you ever do need extra cash, you can take it out from savings. Plus you're contributing to getting your loans paid off too!

  5. Plan B, you can achieve so many goals with that plan and get rewarded with an awesome holiday. It is quite flexible as well so you could give it a trial period and then reasess.

  6. I saw Plan B. I have multiple savings accounts (through ING) and I contribute money to each of them every month. Yes, it means I'm not saving as fast, but I'm saving in multiple categories. This is how I was able to afford a new computer AND continue building my emergency fund AND save for travel all at the same time.

    It makes me feel better to save in several categories rather than just having one account that could be for multiple things.

    Plus, any extra money towards your debt is great!

  7. I vote for paying off your student loan. If you do get engaged you can have a change of course. If you do get a pink slip again next year you won't have to stress about meeting the minimum payment.

    Many time I have though about abandoning my commitment to pay off debt, but I didn't because I didn't want to freedom to be delayed too long. I have had my share of course corrections and time where I had to change course temporarily.

    Stick with it and do what is best for you.

  8. Plan A-

    you still get to pay off your debt faster, but you are creating a safety net for car repairs, your emergency fund, a future wedding, or a house down payment.

    I used to do small little amounts to multiple goals and it was emotionally unsatisfying because I never really felt like I was making HUGE progress...

  9. I like plan A. You can save the money for anything... while paying off the student loans. Yeah to debt freedom!