Comments on: What Debts Should You Pay Off First When You Get Extra Money?

By: Cyndi

Cyndi — Thu, 10 Sep 2009 04:25:34 +0000

Thanks for your help. I am pretty sure i will be paying the credit card off.

By: PT

PT — Wed, 09 Sep 2009 06:02:20 +0000

@Cyndi – Personally, I would pay off all my credit card debt prior to buying a house.

Putting 26k down on a house worth 188K isn’t going to eliminate the PMI. So, buying a house with that small of a down payment is going to cost you more than it would if you waited to have 20%.

I say just pay off your cc debt, then work on the 20% down payment.

By: Cyndi

Cyndi — Wed, 09 Sep 2009 05:15:42 +0000

We are getting ready to build a house our loan amount will be 188000. I have 26000.00 i could either pay on the house so we will only be borrowing 162 instead of 188, or i could pay on my credit card debt. Which would save the most money?

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Fri, 10 Jul 2009 03:28:42 +0000

[...] Money from Prime Time Money presents What Debt Should You Payoff First When You Get Extra Money. A great post on why you should have a plan even if you don’t have the extra money right now to [...]

By: Carnival of Debt Reduction » Blog Archive » Man vs. Debt has posted the Marathon Carnival

Thu, 07 May 2009 04:06:42 +0000

[...] Prime Time Money discusses which debts you should pay off first when you get extra money. [...]

By: TStrump

TStrump — Mon, 04 May 2009 05:56:44 +0000

I would definitely pay off the ‘bad’ debt first – high interest consumer debt, etc.
At least with ‘good’ debt, like investments or your house, you’re getting some kind of perceived value.

By: ctreit

ctreit — Sun, 03 May 2009 18:25:59 +0000

I guess the answer to this question also depends on how big the windfall income is. If it is big enough, debt snowballing is really not necessary. It may even be counterproductive if you applied it. You may just go for the feel-good effect of debt snowballing and then spend the rest of the windfall. It is most important to make sure that an income windfall is actually applied to debt.

By: J

Sat, 02 May 2009 11:22:03 +0000

Hate to sound like a broken record, but the daily amoritization of Federal student loans is just evil, especially for a numbers guy. Not to mention their collections personnel are just plain mean….
And I’ve always believed debt-free is the way to go, but a sudden infusion of cash (lotto, bonus, etc.) does offer a little splurge, like a nice dinner out or something. Just keep the splurge to 25% of the total, and be wise with the rest.
PS, like the new pic!

By: MoneyEnergy

MoneyEnergy — Fri, 01 May 2009 22:22:25 +0000

I love questions like this. I think that if you have many debts, it’s definitely going to be more motivating to do the snowball and take care of the smallest-sized one first just to get it off your back. Also, it’s better if you can (at least, this is how it works for me) at least knock out one entire line of debt with your extra cash rather than part of one and part of another.

Another way to think about the question is what use of this extra money will give you the most immediate/beneficial leverage? It might actually be something other than paying off debt. Like if you need to buy a bike or get your car fixed or … something else that would provide more immediate and lasting benefit than just paying off a debt line. But I think usually it’s going to be wiping out some debt that will help most.

By: Friday Quotables - Heavy Hitters Edition | StretchyDollar

Friday Quotables - Heavy Hitters Edition | StretchyDollar — Fri, 01 May 2009 17:25:29 +0000

[...] What Debts Should You Pay Off First When You Get Extra Money? – PrimeTime Money “any people often struggle with coming up with a plan to get rid of their excess debts. Not having a workable plan is probably the biggest reason many people fail. But I also suspect most people never even get to the point of making a plan because they don’t have the extra money. That was always a big barrier for me. That’s why I think it’s key to make a plan and take action when you finally do bring in some extra money.” [...]