but I’d have to call each month and have them go in the computer and change it to be applied towards the payment. They said that they can’t take partial payments or something like that. So, now I just add a little bit extra to the total each month. It’s easier that way.
I’ve ever had has always compounded daily and I believe they told her they do. In fact my Wells Fargo statement says right on the front on the right hand side that the interest is figured daily and if I am trying to pay it off to be sure and state principle only on the payment and to pay as early as possible. I’m hoping to start doing that by mid summer 2014.
My second mortgage does, but my first doesn’t. So, I just set aside 1/4 of the amount every week. Every 4 weeks, I make a payment. For the other mortgage, I send in weekly payments and I can see that parts go to interest and parts go to the principal. Over time, I was able to see that the weekly payments paid down a few more dollars each month than the monthly payments did.
If they are compounding interest daily that means if they are charging you say 10% interest on $100 that is $10 interest for the first day. Then they compound that interest into your principle balance so the second day they are then charging 10% interest on $110 and the interest is $11 the third day is figured on $121 and the interest is $12.10. etc. through the 309 day billing cycle so it can really build up. Of course if it’s 10% interest per year the amount of the daily interest would be much smaller, but it would still add up.
So yes the quicker you pay on the bill the lower your interest will be and the more you will save in the long run over all. The important thing is to remember to pay enough to cover your minimum in each statement period. I pay a minimum of once a week on our Best Buy bill and in the last four months saved around $87 in interest on their compounded daily interest rate as a result. I make big payments on each pay day and little ones as a bit of extra cash comes in. If it’s only $5, then $5 goes on, if it’s a sudden large windfall then the entire windfall goes on. That card is at 9.9% annual interest rate (see why I hate it) and six months ago the balance was roughly $5,000 and I’ve got it down to $2300 in four months by nickel and diming it to death.
When I had a mortgage and tried myself to pay every two weeks they definitely made it most difficult or to do it smoothly put on such a fee not worth it. My thought would be putting that extra toward principle would be the way to go, however they figure their interest, the less they have to charge interest on the better off you are.
Even if it is not a lot, anything is better than nothing, every penny that I can get off of it , I want off. We plan to refinance as soon as we can to get the interest rate down as much as possible, but in the mean time…which brings me to another question.
The reason we took the loan was to restore our credit(we paid a hefty down payment and are paying more than needed each month) …I KNOW…but hear me out, we were unemployed for a long time and ended up filing for bankruptcy, not what we wanted, but how it went down. We have been completely cash for 3 years now, I have no credit score at all and my husband’s is very low.
We foresee a move so in hopes of getting a decent mortgage down the line we decided to help our credit out now. I will say we are reaping the rewards of better fuel mileage with this car loan, which helps with the added insurance fee and we intend to pay it off quickly, but not too quickly so the credit can be repaired,but I don’t want to be cheated by Chase either.
So how long should we wait before we refinance to get the interest rate lower?
We used to have a 2nd loan on our mortgage. It was a small amount and our payments were around $139 a month. We always paid more than we owed. We slowly increase the amount over time, until we were up to about $350 a month. All the extra went to principal. Because of the way interest is calculated, our payment due each month was actually less the $139.
It is my understanding that they calculate interested daily based on the amount of the money still owed. So if over time you pay more principal, the less the amount the less interest. It may not be a significant amount but it does add up. Don’t let a mortgage company try to persuad you from paying more (if you want too that is). They would much rather try to convince you NOT to do it. After all they are making a lot of money off you. And for them every penny counts!
see if there is anyway you can lower your gas, water, or electric besides cutting back usage. I keep saying I am going to call to get us on bill leveling for gas/electric. It averages you bill over the last 12 months to help cut out the spikes in the summer and winter. I like it for budgeting purposes even being debt free. It doesn’t technically let you pay less but it feels like it since the spikes are leveled out.
We have a bundle through the cable company. We have phone, internet and cable. I have “heard” that you can bundle 2 items, depending on your cable company, I guess. If you still have cable and want to keep the phone as is, see if cable will bundle your internet and cable. It may save you some $$. Of course when we did this, we had already had a bundle at the old house. However, because wwe were moving, we qualified. Plus, we found out that even if we were not moving, it had been more than 12 months so we requalified at that point, even if staying at the old address.
Since we are debt free except the house, our cable package is bigger than it used to be. After about 16 months, I still can’t believe how much we are paying for cable and we don’t even have any premium channels. 8-|
The rest went to fund out emergency fund. We are at 9% taken out of his check. We are working towards 12% but it will take some time. We increase it 1% every 6 months.
I am planning to call the internet company tomorrow to see if there is a lower plan we can get on. Our phone bill is only $4.72 a month. That is the taxes for our area. We have ooma as our phone. We got it as a christmas present from a family member. I am also planning to change our garbage pick up from weekly to every other week. That will save us about $7 a month.
Do you have tax money coming back, or have you got your taxes that level? At this point for that small amount I would not stop the 401K.
However much you husband’s company matches, that is the amount of 401K you should have taken out –Per Dave Ramsey. Dh and I still owe huge amounts, but we are funding 6% into the 401K because that is what the company matches and with our ages being 65 and 62 our time to put back enough for retirement running short.
If it was me, and I have done this more than once. I’d cruise the house and see what I could sell and then sell it. I know you’ve done that to some extent, but have you cleared your bookshelves, put nice clothes in consignment shops, cut back your cable, cut back your telephone service? Unlike the government who doesn’t think little bits add up, little bits really do add up. Check your utilities for overages etc.
What are you sending extra to this besides the required minimum payment? As far as the 401K, is the employer matching any of the contributions? I would contribute enough to qualify for the match and then use the difference toward this debt. 2800 isn’t really a lot of money, I don’t know that I would quit contributing to the 401K to pay it off.
Do you have extra you are paying as a snowball? If you want to get Gazelle, then sell stuff, reduce your 401K, make extra money and knock it out! Then you can move on to baby step 3!
who’ve made it debt free and stayed in this blog. You are so valuable to the rest of us.
I need to pick everyone’s brain. We have $2800 in debt, it’s interest free for the life of the loan. Outside of our monthly bills, mortgage, and food it’s the only debt we have. Before we had the debt of $2800 we’ve been relatively debt free for the last couple of years. Currently, my husband has 9% taken out for a 401K plan at work. So my question is should he stop funding the 401K until we pay off the $2800?
We have about $1500-$1800 in an emergency fund. Where I live, things tend to be more expensive when emergencies come up. We found it really wipes out the $1000 fund quickly. So we upped what Dave’s says of $1000.
We have managed to pay off 3 settlements in the past year. One was just paid up last month and one this month. Still paying on a Dell account and 2 Home Depot accounts. We also have a financial loan that we are paying on. All of these accounts are closed and in settlement agreements.
that you need a credit card to survive. Either that, or he doesn’t want to wait and save up for stuff he wants. Honestly, if you’re going to pay it off every month, why bother?!?
I certainly hope you guys get on the same page, because right now you’re not even in the same BOOK…
1) you do not NEED a credit card to make ANY purchase. By federal law, if a company accepts a credit card, they must also accept a debit card from that same company. For instance, if I had a MasterCard credit card in my wallet, and a MasterCard debit card in my wallet, a hotel or merchant or restaurant could not tell me they’ll take the credit card but not the debit card. They must accept both. That didn’t used to be the case. Now it is. Which means that there is no longer a reason to carry a credit card, unless you want to spend more money than you have. Which is EXACTLY what the credit card companies want.
2) You do not NEED to “build credit”. The vast majority of us already have credit reports, from a variety of sources – paying your utility bills, paying rent, paying mortgage, paying doctor bills, etc. If you are on time with all of your bills, that’s all you need. If you are behind on any bill, getting a credit card will NOT improve your credit score. Getting caught up on your bills will. The only ones who tell us that we need to “build credit” are the companies who sell us the credit. Which is nothing more than any other merchant yelling at the top of his lungs “BUY MY STUFF!” No more, no less.
3) If you and your husband really truly want to get ahead financially, Dave Ramsey, through his books, his classes and/or his free radio show, can give you a clear roadmap for how to do so. Listening to the banks and the credit card companies and their claims is only a map for how to get deeper into debt with them. The two approaches are mutually exclusive. We talk here on the list about strategies for meeting Dave Ramsey’s taught goals; reading through his books will help you understand why we have those goals, what they are, and why they are so important to do in a particular order.
Please know that you are standing now where a lot of us have been in the past – either months or years ago, and you’re asking questions that many of us asked at that point (and since then). Dave is not some new age touchy-feely magician. He is a financial counselor with decades of experience studying why people go into debt, and developing ways for them to get out of debt and build solid financial lives. But to tap into that knowledge, you WILL need to either listen regularly to his show, read his books, and/or take his class. Merely reading the posts on this Yahoo group will give you the “working end” of his strategy. You need the whole picture before you can make it work. But it will work, and it is working for folks who stick with it. I hope you AND your husband make the decision to learn more about the Dave Ramsey approach, by whatever means.
You don’t need to have credit cards to live and I know many people who don’t have them.
Personally our only debt is our home mortgage and that is something we regret very much. We love our home, can make the payment witouth a problem, but we hate the feeling of owing so much to the bank. If I had to do it over again, I would have waited and saved up the cash.
If you haven’t read it already, get a copy of Your Total Money Makeover by DR. See if your library has it on cd as well as that is usually how I need to get books for my husband to “read” them.
Stick around, ask lots of questions.
You don’t need another credit card! First, your score will improve as you pay off debt. Second, why do you need to handle credit? If you want to pay cash, you don’t NEED credit. Third, a debit card will do everything a credit card will do, except incur more debt. Fourth, and I’ll be nice – your husband is sadly mistaken. What big ticket items do you need? New washer? Save up and pay cash.
Car? Same thing. You can actually buy a house with cash, but most people don’t want to wait long enough to save a couple hundred thousand dollars..
But you do NOT need a credit card for daily living, and you’ll be better off without it. I hope I wasn’t unclear.
I got a pre-approved cc in the mail yesterday. DH says I should get it and use it wisely to improve my credit score. I’ve said no I don’t want a cc. Is he right. Won’t my credit score improve as I get my cc cards paid off? Do I need another cc to prove I can handle credit? I want to pay every thing with cash. He says its impossible to live like that, you need credit for big ticket items
and read it (or get the audio version and listen to it). You certainly can purchase large ticket items with cash; we did just purchased a 2010, loaded Equinox for $22,084 this past week with cash ($100 bills to be exact). We’ve sold two paid for vehicles in the past year and have had those funds sitting in the bank. We’ve been looking for the right vehicle and finally found it but we use cash advance online service. Since we will now be saving $100 a week in gas with this new to us car, we’re banking that money. In 4.5 years we’ll have over $23,000 in the bank in car payments we’ve paid to ourselves ($100 a week for 4.5 years). We figure we’ll have this vehicle good and miled out by then (we run our cars into the ground), and with the sales price of this car, and the money we’ll have saved, we’ll actually be moving up in vehicle when we’re ready to sell the Equinox. It’s all in the mindset. Your husband is thinking “normal”. You don’t want to be normal. Read the book, listen to Dave’s program either on the radio or online, make a plan (a budget and sinking funds), start some automated savings, and talk to this blog. You’ll be on your way before you know it and please, don’t get that credit card. You’ll learn that a credit score isn’t going to be a big deal to you, having cash on hand to buy things will be, however.
I am disabled, and desperately looking for additional jobs to suppliment my income. I have been told of virtual call centers, etc. Has anyone had experience wth them and agood bad, experiences. I do some private shops. I have an ebay store, for Fisher Price and others. NEW!
I have 2 kids and they deserve more. I also have a truck sitting in the driveway that the pinions went bad one, meaning I need a new rear end ( for the truck) LOL. I have a great mechanic, and it will cost less than 1000. And most it would have cost 3 or more thou. the truck is sound, but, older. Good into bad thing! I just have no money to save. I have some of my emergency fund built back up, but struggling with that, and things continuing to break down ! Washer, plumbing, etc. I can do most things myself, but not all!
that were called “money management” had several limiting drawbacks
1. may require a minimum deposit amount that is pretty large. ($25,000 or more)
2. may limit the amount of transactions that are allowed without fees (both deposit & withdrawal)
3. may require a minimum time of having the account open without a penalty fee.
As you will hear Dave say often: Never buy anything that you don’t understand. If you can’t explain the operation of this account to an 8th grader – you need to do more homework.
Just my opinion – Your mileage may vary
protecting your property from creditors, and it runs in my mind that TX is the same way. The only concern I’d have is that you may only be able to file a homestead exemption on your primary residence. If you filed on the land, you might not be able to file later on the house.
Look up your state homestead law online. If you don’t understand it perfectly, you should spend a few bucks on legal advice. Filing this properly could be the difference between being able to protect you house in a financial disaster or being out on the street. A few $$ & minutes with a real estate or estate planning attorney is a small price for being sure it’s done the right way.
I don’t live in Texas so I have no first hand knowledge, but I’ve always thought that Homestead Exemption applies only to where you reside. I can’t get the exemption on my rental properties, because they aren’t my primary residence. Now you mention lots and I read,no structure erected on them or otherwise unimproved. If they are adjacent to your home, and therefore can be joined together to make one property, then homesteading might be possible, but that brings up the matter of ownership of your primary residence.
Congrats on paying off your home, but now is the time to get the home in your name, and therefore homestead exemption on that property. As the will has been probated (the word you struggled with LOL), who now is the owner of record of the property. In the will, did it state that ownership of your particular property is now transferred to you? Was there a “right of survivorship” set up with your parents to their other properties? To me, I would concentrate on handling this matter first, versus homestead exemption on lots.
Like I said, I probably didn’t help at all….
My parents helped me buy my house in 1996. My credit was bad, of course, so they put the down payment and the house in their name. I paid the house off last April. Yeah!!!
My parents died a few years ago, within 10 months of each other. So here we are a few years later and the house is still in their name. My brother is the executor of their will and yes the will has been, oh darn can’t think of what it’s called right now. I’ve asked my brother about getting the house in my name a couple of times since April and he keeps telling me we’ll get it done. My brother is upstanding and responsible but I’ve noticed that since he became a grandpa for the first time last December he is dragging his feet on a lot of stuff.
So to my question. I recently purchased 3 lots next to my property. I received papers from the county to fill out how much I bought the new lots for. There is also a place to apply for homestead on the property. So, do I go ahead and homestead the new property and can add my house in later when I get it in my name or wait until the house is in my name and do it at the same time. I’m 42, my parents were in their 70’s when they passed away. My taxes are pretty low right now.
Oh and I’m in Texas.
Me, I can’t die, I have too many things to do before I die…LOL
I say that jokingly because 1 year and 2 months ago I walked away from a car accident that I should have not survived. It was UGLY. Motorcycle hit my car so hard it turned me 90 degress and pushed me backwards approx. 20 feet. Also, the motorcycle imbedded in the side of my car. That motorcycle should have come through the car, estimates of his speed were betwen 95-140 mph, and killed me, but thank the good lord above my car stopped it. And the coke head that hit me walked away too…after FOUR days in the hospital.