Apr 15, 2008

Not possible I think

After posting the last entry, I realized that it might not be possible to bring down our credit card debt to $6,400 this month after looking at our financial spreadsheet. We can only afford to put $150 to CC debt for the next half of the month. So to rectify it the new April goal is to bring down debt to ~$6,600.

My plans keep changing and I'm sure nobody would miss that. One example is to invest 25% of the Term Deposit ($250) in some new fund instead of in the No Purpose (Yet) Savings. Our only investment is mutual fund and we want to diversify bit by bit. I'll have to choose one from the many funds available first and build it up to $1,500 the way we will with the first one, hence $750 from the Term Deposit maturing end of this month. I had planned on putting that much for every fund we decide to invest in. I get impatient to get wealthy! :)

6 comments:

  1. I know what you mean - I get very impatient too. I often think about the places I would like to invest money when my priority is actually paying off my debt first.

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  2. It's during these moments when our future helps get solid. We plan ahead now because of debt. "Sometimes" having debt has its advantages.

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  3. I know why but have to ask why you have cash sitting earning low interest when you have such high interest debts? Good luck.

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  4. Whatever money we have are sitting on high interest savings, ranging from 8.2% to 8.4%. We've been channelling our extra money towards paying off debt for now. All of the sitting money are essentially our emergency fund.

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  5. hi tasha, this is an interesting predicament. you might want to compute the cost of paying your debt in small chunks (interest payments for one year for example) as opposed to "high" interest on your deposits to see if its really worth it. I suspect being more aggressive in paying it off AND THEN rebuilding your emergency fund will be a better strategy, but it really depends on your credit card interest etc. :-) anyway, just a thought. i wrote something about this last year:

    Which comes first: Pay debt or save money.
    http://blogs.inquirer.net/moneysmarts/2007/04/04/which-comes-first-pay-debt-or-save-money/

    you might find it useful. Regards!

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  6. Hi Salve!

    Oh we definitely plan to pay debt off first. I'm not in a hurry to meet our $3,000 EF goal while we still have CC debts hanging above our heads. All the liquid money we have only get a small percentage of the discretionary money we have bi-monthly. Most of our discretionary money goes to debts unfortunately, but that will soon end! :)

    I put aside a small amount because I'm strict about the PYF (pay yourself first) rule. I truly believe in it.

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