My Good News
Whew! I checked my bank account this morning and found out that Discover DID get the $200 into the account, so I won’t bounce anything! As soon as I get other money transferred into my account, I’ll pay off that $200 so I won’t get stuck with all that interest.
My Dilemma
When I got back from the beach I read Dave Ramsey’s Total Money Makeover and enjoyed it, but it left me torn on what’s best for me right now: paying down debt or saving money.
Usually when this question is asked of an “expert” they suggest that you save if you’re getting a better return than the interest you’re paying on your debts. If I had substantial credit card debt, I’d know that it must be paid down as soon as possible, but I’m not in that boat.
I’ve never had credit card debt and never plan to, either. I didn’t get my first credit card until I was nearly 22 years old, so I bypassed relying on credit like other college students do. I might have accrued some credit card debt if I’d had one, but I doubt it. It never occurred to me that I should buy things now that I won’t be able to pay for when the bill comes due. So it was not from a strong sense of responsibility that I never fell into the credit trap, but a lack of someone telling me, “You can buy it now and pay for it in a few months!”
Currently I have the student loans that I pay interest on every month and I can write it off come tax time. I read today that I can do this every year until it’s paid off instead of only for the first five years as was the original tax law. As my pay increases every year, the payment I make will be a smaller and smaller chunk out of my monthly budget. Theoretically I could just pay every month for the next 13 years and four months and it would be no big deal. The money I would have put to extra payments could be put into savings for a car or a house or something.
But I’m not planning on working for the next 13 years and four months. Here are a few of my goals:
1. Get married in 2-3 years (this depends on when/if B proposes)
2. Replace my 4Runner with another used SUV in 3-5 years (this depends on how long it lasts…I’m averaging around 24,000 miles a year presently, and I’m just over 106,000 right now…I’d love for it to still be reliable at 200,000, but….it’s unlikely)
3. Buy a house in 4-5 years
4. Quit my job after having first child in 5-6 years (depending on when/if I get married)
I’d like to increase my net worth as much as possible in the next 5-6 years that I’ll be working, either by paying down the debt or putting more in savings, so that we’re in better financial shape by the time kids come along. B expects to help me pay off debt once we’re married, just as I expect to help him pay off any of his own, so I don’t feel an all-consuming need to be out of debt before getting hitched…but it would be nice to have a chunk of it out of the way.
So what I’m getting at is I don’t know what to do. Does it make more sense to save or pay off?
My Snowflaking?
A long time ago I opened up a Upromise account. I don’t remember WHY I did it, exactly, but a couple months ago I went ahead and linked it with each of my credit cards. I didn’t think anything of it (knowing that I’d only earned about forty cents in four years) until I went to my student loan servicing site today and saw a link about using Upromise to help pay off my loans.
I’m not certain how it goes yet. I have to wait five to ten days for it to go into effect or something. I’m assuming that it will draw money automatically from my Upromise account, which would be rad. Since I linked my accounts up (this was probably in April) I’ve only gained about two dollars, but I explored the site a little more and found out that I could also link my CVS and Giant discount cards. This will give me a tiny percentage if I buy certain brand names. It probably won’t help too much, but anything I get is free for me.
One of the companies that offers a discount is Exxon, the gas station that I use the most, so I was pleased to see small amounts coming from those purchases. For the next 2 1/2 months or so I’m getting 5% back from gas purchases from my Discover card, and one cent per gallon from this, so a little money is being saved.
Also on the Upromise website, I saw that what I earn through taking E-Rewards surveys can be transferred over to Upromise. After e-mailing E-Rewards’ customer service, I found out that I’d have to cancel my current account and open up a new one linked to Upromise. After I choose a reward with the $50 I’ve earned so far, I think that I will. Most of the rewards on the site are only things like $50 off when you spend $125 at E-bags.com, and that’s not really worth it. The only good reward (for me) is having money transferred to my Borders Rewards account. This can only be done in $15 increments, so I may just transfer the $45 I’ve earned and let the other $5 go…or wait until I’m up to $60 and then open a new account.
Since I never pay attention to the Upromise account, it’d be cool if even a dollar a month gets added to my student loan payoff. I’m not going to go overboard trying to always buy things that are asssociated with the account, so this won’t change anything I’m doing. And since I’m continuing to pay the same amount in loans each month, this will just be a little snowflaking. I read about snowflaking a lot, but it’s not something I’m terribly interested in utilizing for everyday life, so this is just a tiny way to help.
Anyway, for those of you who don’t have a Upromise account and aren’t squeamish about linking your credit cards and discount cards, this might be a fun thing to sign up for. Once my student loans are paid off, I’ll continue with the account and use the funds for my kids…even if they each only get $5 once they start college.
