I'd like to join "officially" starting in the November Thread, but thought I'd post here and ask a few questions to get acquainted before we dive in in November!
First, if we have a decent savings, can we count that as just having BS3 on its way, even though we still have some debt? Or should we keep only $1K and spend the rest on debt reduction?
I never felt so sick as when i totalled up what i thought was just a "small" debt and realized how much it really was. (when you include the car loans- sickening!)
Also, we are in a bit of a dilemma here.... our financial situation (now) is very stable. we both have good jobs with stable companies. my DH works in software, and he always has that "fear" so he likes to have a nice cushion in savings, regardless of our debt. it keeps him comfortable, and that makes money talks/decisions easier for us, if we have the "cushion."
But, I really really want to pay off our debt. we have stupid debt ("wow! 0% financing for this bed?! We'll do it!") now we have a monthly payment on an effing bed. it's a debt we could wipe out immediately, but means dipping into savings. (read: make DH uncomfortable.) it's $100/month
also, i am on a lease right now with my car. it's a cheap payment. $258/month. it ends in December, and the car isnt a great car- so I'd rather not buy out the lease. BUT, the buyout is less than the cost to buy a car of the same make/model/mileage. so technically, it's a "good deal." we are trying to have children.. to no avail as of yet... and ideally, i'd rather have something bigger/safer for a child. do we get something different now, (pre-owned) with a similar payment but finance instead of lease, or buy out the lease on current car, and hope that we can get decent trade in if we need (want) a new car if we're blessed with a child? my current car is OK, but i really dont feel that safe in it, and it's already making rattling noises at only 2.8 years old! there are some emotional issues here, too, like that i've given up so much for 2 years basically, in preparation to TTC, and feel like i "deserve" to treat myself to a car with heated seats. yes, trivial and spoiled, but i had to put it out there.
we also have student loans. each of us has consolidated (separately) about $15K of student loans, which might be down to about $12K each now? they are at 2.4% interest. there is another private loan that has a $160/month payment with a variable rate that infuriates me.. it's the first on the chopping block at about $7K I think.
BUT, if we paid the bed and the SL, it would eat most of our savings.
we dont go on vacations. we go out to eat maybe 3x per month at MOST, and in November, we're doing the home-cooked challenge- no going out to eat at all. Possibly, we'll do in December too, but that gets hard with holiday parties and get-togethers out the wahzoo.
we have phone/FiOS/internet combo, but the contract is up in Feb, and we'll eliminate the phone to save $60/month. yes, $60 for phone. insane. we're getting some VOIP thats a one time fee instead. we're going to haggle with the cable/internet company to get our price down since it's so much... right now we pay $200/month for phone/cable/internet. we have to keep the TV, it's DHs only "treat" he doesnt go out to bars, shop, spend on anything really... except trips to Wawa on the sneak for snacks.
we also have PMI on our mortgage, which we're finishing some last improvements to hopefully re-appraise and eliminate the PMI-it's 154/mo.
OK, so that's my long intro that doesnt even include everything!
the car for me- what to do? "invest" in a good, reliable car now, (thinking of spending like $18K or so) or just buy out the lease and see what happens? buy out would be $12K that we would have to finance but could probably pay off in 2 years.
the debt- keep it and hold onto our nice emergency fund now (about $12K) or use the cushion to pay the debt, and then start on emergency again?
some of it seems counterintuitive to me- paying the bank before paying ourselves....
sorry i'm so wordy!