Payoff loan or continue payments wwyd?

[MissMommyNiceNice]

I am leaving my part-time job and we're going to one income. I have figured out how to do it, we'll be fine. But my husband just suggested a way to have another $80/mo. We have a credit card pay off loan with our credit union. Its payment is about $80/mo. Pay off is around $2000. He suggested paying it off from savings and then putting the extra $80 into savings each month.

Factors:

$2000 is about half our savings fund

the $80 comes out of his paycheck automatically, we never really "miss" the money or have to make a payment

Interest is around 6.5%

I'm leaning against it. My suggestion was to lower our HSA contribution by $50/mo. And if it comes to it, cancel dental for a year or so, which is $80/mo.

What do you think, frugal mommas? The current one income budget I have worked out has us putting $200/mo in our savings. This could make it close to $300. But, we'd be down by half. *sigh* ...to be independantly wealthy...

[MacroMama]

I would leave your expenses as they are.

Also, I don't know why you are leaving your part-time job, but I would keep working until I had an 8 month emergency fund in case anything happened to your husband.

Good luck!

[eirual]

I wouldn't pay it off in one lump sum. $2,000 to work with gives you much more wiggle room and ability to take on Murphy than $50/mo would.

Even though you're quitting your PT job (I'm sure you have your reasons), I'd keep on the look out for ways you can bring in money and throw anything that's leftover at that debt.

Good luck!

[MissMommyNiceNice]

well, it seems dh cannot possibly handle the boys together by himself while I'm there and we have no one else that could watch the baby. It's too difficult to take him with me. Plus I have a seasonal market stand and I'm super super busy right now.

I think it's probably best to leave it too, just seeing what everyone else thought...

[lakeruby]

I agree with some of the previous posters-- I would not pay off the whole $2000 at once, since it is half of your savings. If you can find ways to save extra each month, maybe increase the amount of principal you pay, or decide to pay it off once have a bit bigger savings.

Good luck!

[laohaire]

What other debt do you have?

I would pay it off, but only if that $80/month really goes somewhere - right into savings, snowballed to the next debt, whatever. But if you don't have a strict budget it's too easy to lose $80/month to "wherever."

[MissMommyNiceNice]

Other than monthly bills (including mort & car pay), this is our only debt. We do make one extra mort payment a year already.

[Mulvah]

My advice is based upon my personality and what works for me. I couldn't stand to have 2K of debt sitting out there, increasing due to interest, when I have money to pay it off. Unless you are earning 6.5% interest (highly unlikely unless you invest in stocks, bonds, etc.), I would pay the debt off immediately or within 3-4 months. I would then focus on putting every extra penny back into your savings account.

(Do you earn money from your market stand? If so, did you budget for it? If not, I would definitely use that money to help pay off the debt or to replenish your savings.)

[Tjej]

If you can pay off the debt and know you are going to put the money directly into savings I would do it in a heartbeat. If you cannot trust yourself to do it 100% then I wouldn't touch the savings with a 10-foot pole.

Tjej

[MissMommyNiceNice]

Well, we just did our taxes and it looks like we're getting some decent money back this year. Here's my new plan:

Take $2000 of savings & put it into a CD our one bank offers that earns 1.4% for 6 mos on $1000. That means in 6 mos we'd have earned $240. If we roll that over again, we'll have earned $500. At the end of either 6 mos or a year, we'll pay off the balance of the loan. I think this will work best for us.

My market stand pretty much breaks even in reality, on paper it loses money. I do it for the love of plants and the fact that it provides a valuable service to people in the community, especially those that can't get out of the city for plants. I hope that in the next year or two it will be profitable.

[Smithie]

"well, it seems dh cannot possibly handle the boys together by himself..."

Ever noticed how you almost never hear about the MOM who can't handle parenting while the DAD is off at work? And when such a mom does emerge, she is excoriated and pathologized and presumed to be deeply defective and in need of immediate mental help?

I think the plan you've come up with is a good one. I further think that if your DH cannot parent his children so you can go out and earn part of the family income, then he is telling you that he wants to be the sole breadwinner. Enjoy your farmstand and your children! Tell your DH that a grouchy feminist on the Internet told him to enjoy his job, heck, maybe get a second one!

[MissMommyNiceNice]

Smithie, you're adorable! It's actually very frustrating for him & he feels horrible about it. DS2 is only 3 mos and at first he was very good for DH but then he woke up after that 2 mos grace period babies seem to give & realized that DH doesn't have boobs. I've been wanting to leave the job anyway, b/c if you ask me, it's a waste of city money & it was boring me. Plus, now I actually get to see my husband.

Thanks for all the responses!

[TwinMomPlus]

Yea but if someone was going to waste city money, it may as well be you!

Just kidding, I don't know your situation but it just seems like a shame to quit an easy part-time gig just because your dh is being a baby about the baby, lol Seriously though, I think maybe wait another month before you make any decisions because I am sure your little one will come around. There are PLENTY of stay at home dads that do great with their kids and none of those dads have boobs either. And what about all the babies in daycare? They make do just fine without their mommies (I'm sure many go through an adjustment period, too). Your son WILL get used to it. I just don't want you to regret anything.

Also, before you pay it off, find out if you have to pay all the interest regardless of when the balance is paid. Some loans require you to pay all interest anyway.

[MissMommyNiceNice]

Trust me, it's not a rash decision. We can do it w/o the money, and although I've been a little lax with the budget, this will really give me the impetus I need to get focused & back on track. Besides, I have the opportunity to start a new market being opened, and I wouldn't be able to do it if I was still working. I'd rather be a little poorer doing something I loved instead of miserable & rolling in the dough, kwim? What can I say, I love dirt!

[dancebaraka]

Hey Mama!

I'm the oddball here... I'd pay off the debt. I have an aversion to debt.

[dancebaraka]

... and I bet you could find ways to scrap out another 50-100$$ for savings every month. The Mamas on this board are excellent at reviewing family budgets & showing some options for trimming... post if you like!

[mum4boys]

Originally Posted by Mulvah

My advice is based upon my personality and what works for me. I couldn't stand to have 2K of debt sitting out there, increasing due to interest, when I have money to pay it off. Unless you are earning 6.5% interest (highly unlikely unless you invest in stocks, bonds, etc.), I would pay the debt off immediately or within 3-4 months. I would then focus on putting every extra penny back into your savings account.

(Do you earn money from your market stand? If so, did you budget for it? If not, I would definitely use that money to help pay off the debt or to replenish your savings.)

I would do this too.

[dachshund mom]

You're going to save up money at 1.6% to pay off a loan at 6.5%???

Pay it off now! You'll still have a decent $2000 left plus the tax refund.