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  1. 07-01-2009, 02:59 PM #1
    SpaceCoyboy74
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    Default Snowball or extra mortgage payment?

    I am working my debt snowball and my wife has finally returned to work. Now that we are getting income from her again, she will make enough to cover the mortgage (and then some, but not much more) She get's paid weekly and one paycheck is about 1/4 the mortgage. My thought was to put her paycheck in savings and then at the end of the year, we'd have one extra payment's worth of money in there. I could then apply it to principal. But now that I think about it, should I just put enough in savings to cover the mortgage for the next month and put the rest on our snowball until the mortgage comes next in line?
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  2. 07-01-2009, 03:18 PM #2
    Greebo
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    Debt snowball.

    It may seem hard to believe, but I've done the numbers multiple times, and in the long run, paying off the shorter term higher interest debt first ALWAYS pays off more than paying off the mortgage early.

    The reason is all debt is debt, and no matter what the terms on the debt, the higher the interest, the higher the cost, so if you pay higher interest debt slower while paying more on the mortgage, you end up paying more interest overall than if you paid off the higher interest debt first then later putting all that extra to the mortgage.
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"

    Greebo    (Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
     WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!

    Three     Two mortgages, two one no car loans, one no credit cards, and a partridge in pear tree!
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  3. 07-01-2009, 03:24 PM #3
    mauimagic
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    Absolutely - go by the percentages!!
    Travel light. The baggage of the past can only hold you back.




    “Decluttering isn't just simplifying your life. It's having a vision, setting new priorities and using those notions to get rid of obstacles.”
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  4. 07-01-2009, 03:29 PM #4
    FrugalMomof3
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    I would snowball debt and get that out of the way then focus on adding more towards the mortgage.
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  5. 07-01-2009, 10:01 PM #5
    MaryCarney
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    Can't argue with the snowball - it works!
    Mary Carney Working the night shift 'cause they never have meetings at 3am!
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    Starting grad school September 1, 2010 in pursuit of MSN degree.
    MSN degree completed on 4 May 2012 with NO DEBT!
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  6. 07-02-2009, 06:48 AM #6
    ladykemma2
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    debt repayment
    11% gross to retirement
    10% takehome to tithe and offerings
    emergency fund maintained at 3000(works for me)
    credit card debt 7500
    mortgage free
    freedom accounts/sinking funds that ebb and flow
    then live on the rest!

    i am trying something new. LDS church advises savings or debt repayment should be the same as the tithe. 10% each.

    "i create prosperity, abundance, and savings for me and my household"
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  7. 07-02-2009, 08:48 AM #7
    Greebo
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    Quote Originally Posted by ladykemma2 View Post
    debt repayment
    Technically speaking, that applies to both options...
    If you could kick in the pants the person responsible for your problems, you wouldn't be able to sit for a month.

    Did you know that a 4 year student paying $20,000/year who finances their education graduates with over $103,000 in debt to start? But a student who works and pays cash and takes 6 years to graduate ends with $6,300 in their pocket! So much for "getting a head start by financing!"

    Greebo    (Nerd Spender): Loving and extremely patiently tolerated husband of ceashels.
     WARNING: Y Chromosome behind the keyboard. Adjust your listening filters appropriately!

    Three     Two mortgages, two one no car loans, one no credit cards, and a partridge in pear tree!
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  8. 07-02-2009, 10:35 AM #8
    Denvergirlie
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    Knock out your consumer debt first.... car payments, student loans, credit cards, etc.

    Then save that EF, then you can attack the mortage.

    DR's steps work, don't forget retirement and college savings (if applicable/ desired/ possible) before the mortage as well.

    You can write off the interest on the mortage, you can not do that with your interest on credit cards/ car loans.
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  9. 07-02-2009, 10:53 AM #9
    familyof3
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    work the steps. keep it simple and keep snowballing.
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