Friday, December 12, 2014
Thanks to this post on The Simple Dollar, I learned about a site called unbury.me, which gave me something to think about regarding my debt repayments.
I plugged in my minimum amounts:
1) Mortgage - $862/month at 2.94% (paid bi-weekly, but there was no place to show the two months of the year where I pay $1291 - I guess I could have used $933 as the average);
2) Car - $250/month at 1.9%;
3) Student Loans - $144/month at 4% (I guessed, since there are actually four loans with different percentages - the most common one is Prime + 1.5%).
The result told me that I should continue making these minimum payments until March 2021, when the car will be paid off, and that $250 can then go onto my student loan payment. In October 2024 the student loans will be gone, and the combined $250 + $144 goes onto the mortgage, paying it off by October 2030.
This is pretty cool because I have decided I want the mortgage paid off in 15 years so that I can think about early retirement. October 2030 is a month before my 56th birthday. I can take a reduced pension from my job then, or wait four more years till December 1, 2034 and retire at 60 with a full pension.
Not bad for a part-time secretary, eh?
I also have to consider that in ten years my son will be eighteen, which means no more child support or child tax credits, so I will probably have to start charging him rent, or take in a roommate for the remaining five years of my mortgage payments. Either way, I am about to start saving up to renovate the basement so that Bean or Roommate can live downstairs.
Or I can find a better-paying job, but I would probably have to upgrade my skills to do so. I'm pretty much at the top of my scale right now, except for the 7 extra hours I could be working if I were full-time. That 7 hours actually makes a pretty big difference in my gross pay, but also increases my payroll deductions and student loan payments, and decreases my child tax credits.
Anyways, it is a pretty little site to play with. The recommendations were the same for me whether I chose Avalanche or Snowball.