As I keep tweaking my monthly budget, I’ve realized a few areas that need to be added, thanks to Money Funk. 1) Savings – both for my tuition and emergency fund, 2) life insurance – I originally left this out of my monthly budget, but pay for it every 3 months. It’s much easier to just budget it as a monthly payment, and 3.) bank charges. Since I have a couple of checking accounts that charge a monthly fee, I added them into my equations as well. In doing all of this budgeting to the penny, I realized I really need to pay down our line of credit to free up some money.
At a total of $8,380, I needed to come up with a realistic plan. As much as I’d like to send them huge lump sums and pay down this crappy debt, I have to be more realistic so that it actually happens. Using a couple of different calculators, I figured I could have it paid off between 3 – 5 years. Here are a few different scenarios using a couple of different online debt repayment calculators:
- CreditKarma’s calculator is very helpful. Based on their calculations, paying $300 a month, I could pay off our debt in 4 years. Their calculator offers a few different options to see how much quicker the debt could be paid off if I paid more monthly, or reduced the debt by a percentage.
- Bankrate’s credit card calculator lets me see how much of each payment is going towards principle and how much is going towards interest using their amortization chart. It’s shocking to see how much is paid in interest over the length of the loan. I think if more people saw this upfront before taking out a line of credit, more people would turn them down. I know I would have!
Each month, as additional funds come in that are over what I’ve set as my monthly budget, I intend to put more towards this debt. Over time, I’m hoping to pay this off before the estimated 4 years. If I can stick to my budget closely, and retain the income I’ve made in previous years, this should be rather doable.
What calculators have you used to show repayment? What about savings calculators?