I got a bit of studying done yesterday but not nearly as much as I would have liked. I also did some number crunching. Before I did my 'Own Up to my debt' post I had my student debt at a nice round number like $40,000.00. Well would you believe it was almost $10,000 more and at the time I wasn't including my visa card debt in that calculation. Also at that time I set myself the 3.5 year goal, I told every one that if it took 2 or 3 jobs I was prepared to do it. My BF at the time asked me not to fearing that it would sound the begging to the end of our relationship. So out of respect for him I didn't. I also thought I would get a job that started at $40,000 and guess what I didn't. Now this is no one's fault but my own. In my defence I took the first job offered and 10 days after I had handed in my last paper for my last course of my BA degree, I was sitting in training class. So maybe I could have stuck it out and waited for a 'better' job but no one was paying my bills that wasn't an option in my option.
But I digress, let me get back to the the original topic of this post. As I was saying I have been number crunching. With my visa debt my total debt worked out to be $49,058.75 so in order to get it paid off in 3.5 years I have to put $14, 016.78 in to my debt year 1,2,3 AND year 1/2. I have been musing over if I should make year 1 Sept. 2010-2011 or Jan 2011-Dec 2011, since you will notice (see 2011Goals) that one of my goals this year is to put $15,000 into my student debt. However I have now decided to count year 1 of debt reduction, Sept 30, 2010- Sept 30. 2011. Since I think I officially started this journey Sept 9, 2010. This means as of May 31 2011 I have paid off $10,122.48 in debt (sundry debt, visa debt and student debt). However this leaves me with $3,894.30 to go before Sept 30 2011. That means I would have to put at least $973.58 between now and the end of Sept each month in to my student debt, outside of min payments to reach my Year 1 target. Given my current debt reduction rate the number is possible however by the end of this month/ early next month I will have a car. This will significantly reduce my ability to meet this target.
On top of this my plan is after I know what my minimum monthly payments are to shift focus from aggressively paying down my LoC to my OSAP, since it is both the smallest amount and has the highest interest. And of course in October I will be in debt reduction year #2.
Another piece of back ground before I present you with my dilemma. In Nov. of 2009 I took $1000 of my OSAP money and put it into a mutual fund, I wanted to invest it in stocks but was convinced at the bank to do a mutual find (that's a post for another day). Any ways this mutual fund has done crap all for me its was up to $1115 a few months back but as of May was down to $1110. Since its done crap all for me and its likely I have paid more in interest to OSAP than it has made, I am going to cash it out. I had thought to leave it until Nov. 2011 at which point it would have been sitting for 2 years and depositing back in to my OSAP. I am hoping to recoup the $1000 since there will likely be fees for cashing it out.
Now this is my dilemma should I cash it out early (in Sept) to help me meet my Year 1 debt target
OR
Should I leave it until Nov. and let it be part of debt reduction year #2 knowing I will likely not have met my debt reduction target for deb year #1
WHAT DO YOU THINK???? Please any guidance is greatly appreciated.
But I digress, let me get back to the the original topic of this post. As I was saying I have been number crunching. With my visa debt my total debt worked out to be $49,058.75 so in order to get it paid off in 3.5 years I have to put $14, 016.78 in to my debt year 1,2,3 AND year 1/2. I have been musing over if I should make year 1 Sept. 2010-2011 or Jan 2011-Dec 2011, since you will notice (see 2011Goals) that one of my goals this year is to put $15,000 into my student debt. However I have now decided to count year 1 of debt reduction, Sept 30, 2010- Sept 30. 2011. Since I think I officially started this journey Sept 9, 2010. This means as of May 31 2011 I have paid off $10,122.48 in debt (sundry debt, visa debt and student debt). However this leaves me with $3,894.30 to go before Sept 30 2011. That means I would have to put at least $973.58 between now and the end of Sept each month in to my student debt, outside of min payments to reach my Year 1 target. Given my current debt reduction rate the number is possible however by the end of this month/ early next month I will have a car. This will significantly reduce my ability to meet this target.
On top of this my plan is after I know what my minimum monthly payments are to shift focus from aggressively paying down my LoC to my OSAP, since it is both the smallest amount and has the highest interest. And of course in October I will be in debt reduction year #2.
Another piece of back ground before I present you with my dilemma. In Nov. of 2009 I took $1000 of my OSAP money and put it into a mutual fund, I wanted to invest it in stocks but was convinced at the bank to do a mutual find (that's a post for another day). Any ways this mutual fund has done crap all for me its was up to $1115 a few months back but as of May was down to $1110. Since its done crap all for me and its likely I have paid more in interest to OSAP than it has made, I am going to cash it out. I had thought to leave it until Nov. 2011 at which point it would have been sitting for 2 years and depositing back in to my OSAP. I am hoping to recoup the $1000 since there will likely be fees for cashing it out.
Now this is my dilemma should I cash it out early (in Sept) to help me meet my Year 1 debt target
OR
Should I leave it until Nov. and let it be part of debt reduction year #2 knowing I will likely not have met my debt reduction target for deb year #1
WHAT DO YOU THINK???? Please any guidance is greatly appreciated.
You have to be into investing for the long haul. You are doing so well in your repayment. Don't be so impatient. You might have to extend your goal by 6 months that is okay. Mutual funds don't rise and fall so rapidly. You just have to be patient. Maybe you should not invest any money until your debts are paid off.
ReplyDeletePersonally I would be taking that money out right away and putting it in my emergency fund. In fact I think my ING TFSA is earning more in interest that your mutual fund. Then I would take whatever money you have been saving towards your efund and start applying that towards your loan. That way you have $ if something comes up like an unexpected vet visit or something with your future car. Then you don't need to incur debt to cover those things. That way all other $ can go towards debt.
ReplyDeleteA goal is something great to work towards and to strive towards but no need to get discouraged if you don't meet it exactly. You have put a huge chunk of $ towards your debt already this year.
Also I would recommend (if you aren't already) to continue to look for another job that would pay higher. It never hurts to look but don't feel like you are stuck there becasue they are the first ones to offer you a job.
You're doing great and have your head on straight. Stay encouraged! :)
Leave it for year 2. Don't cash it out early.
ReplyDeleteWhat you can do is whatever you miss your goal by for year one, add that amount on to year 2.
Just like Out My Window said, don't be impatient, you are doing great, and Little Lamb has the right idea as well, still continue to look for other jobs, more so ones that you would like more.
Thanks so much for all your advice. But more than anything thank you for responding to my request for impute it means a lot to me.
ReplyDelete