Does this sound like a good plan?

**janelane** · 11-25-2008, 01:48 AM

So, we are going to be TTC in January. If I manage to catch preggo on the very first cycle, baby won't be here until October.

We got a sizeable loan a year ago to buy some business equipment and pay off some things. It's very low interest, but was only for 24 months so it has a huge payment. The minimum payment that I pay (a bit more than the required) is 750$ We are two months ahead right now, so at the rate we're going we would be done in October.

DH gets a bonus in December. I will have to take some of it to pay off his upcoming computer repair, but if I put the rest of it into the loan and then kept paying that 750$ we would have it paid off in May, freeing up that 750$ to put further into the rest of the snowball and, of course, save for baby.

Is this a good idea? On the other hand, going with the DR plan to pay off the lowest debt, we could also eliminate two CCs, but I'm not paying anywhere near 750$ to those CCs so it wouldn't free up as much as fast, and if baby shows in October, that'll be awfully close to the big loan payoff.

Would this idea be better than paying off those lower debts? We will be eliminating a LOT in the next eleven months, either way, because we are on the verge of zeroing out several things, but I kind of feel a lot better opening up so much per month earlier.

Also wondering if it would be best to switch gears and just pay minimums on everything right now instead of working on the lowest debt and put the extra on that loan which would cut off even more time.

WWYD?

**MomToTwoBoys** · 11-25-2008, 11:01 AM

If the huge loan is only for 24 months, I'd stick with paying the $750. If you were paying more than $750 on the two CCs, then I'd say switch. Since you're not, stick with the $750 and get that paid off since there's a time limit on it. You could always toss all three debts into an online snowball calculator and see how much you'd save in interest, switch around the amounts and take a look at whether you'd be doing yourself good by paying off the CCs first or the huge debt.

I know that in my opinion, I'd pay off the 24-month debt first.

**Marie78** · 11-25-2008, 11:59 PM

I like your plan Jane, it wouldn't hurt to check it out and see if it will save you more money to pay the other debts first. If it doesn't then I would try to get the big one paid off before the possible baby in October.

If all goes as planned our first baby is due in July and we only have one debt left, $2,000 on a 0% interest card left to pay on. I'm throwing extra money at that so we are done paying by March 2009 (before it goes from 0% to 7+% interest). Once it's paid off we will save the extra money in an EF to make sure we are as ready as we can be for our baby's arrival. I'm not sure if anyone can be completely prepared for a new baby. I have been calculating our numbers like crazy lately to make sure we will be able to survive as a family of 3 (and 2 cats), if I go from full time to part time work.