Quote:
Originally Posted by OneSickPsycho
Roles are reversed for me... My dad and step-mom are planning on living with me three months out of the year and will be payin' me rent. :nana:
Cap, you're pretty smart about money, but I can't help wondering... Have you done the math to see if it would make sense to use that money to pay off your debt, then combine what you are paying onto the debt and what you are contributing to your retirement to rebuild the IRA's? I'd have to imagine you are paying more in interest on your debt than you are making through the IRA's...
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Yes. I've considered it, but I have low interest debt. $3K is at 6% until paid off, the rest is at 0% (4K till October, the rest until it's paid off, which means minimum payments forever.
). If I don't get the opportunity for 0% again by October to transfer what's remaining of the 4K, I'll consider using most of the emergency fund to get rid of it cause it will go up to 10%.
I had been earning very close to the 6% on my e-fund, but then the fed stepped in and stopped that by lowering rates. I have recently been considering taking that money out to pay off the 3K, but I got into this debt situation to begin with because I didn't have an emergency fund. Right now, I'm of the mindset that I'd rather pay 3% to have the e-fund in place than get myself in the situation I was in a couple years ago and have been struggling to get out of ever since.
I've considered selling off the investment portion of my Roth account and paying off some of the debt, but now is the time to be investing since the market is in a slow cycle. Granted, everything I had put in during 2007 isn't doing squat, but I can decrease my average cost by investing now, thus making my gains greater when the market finally turns around. As much as I hate to say it, I'd be willing to bet the market gets down to the low 11's before it turns around again. Yeah, it sucks to invest in the 12's if it's going to the 11's, but there is no way to time it, so I just keep putting in a hundred every paycheck (2x per month). Eventually, it will turn around and with a lower average cost, I'll stand to make more in the long run.
But you guys are definitely thinking along the right lines. I'd pay off the debt if the interest rates were higher on it. I will have my e-fund where I want it very soon (3 months expenses), so I'll take the money that's going to that and put it toward some of my debt.