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Having some fun...

Senior Contributor

Having some fun...

I'd love to have feedback...and this is mostly to have fun with the numbers (for me.)

 

I have two debts.

 

1)  $13,639.79, zero percent interest.

2)  $29,168.87, zero percent interest.

 

In savings, I have $12,150.  I only have one big ticket item coming up.  That's buying new tires, cost about $1000, in six months or more.  Vehicle inspection said my tires were still in good condition.  

 

My regular paycheck is budgeted out so that I am putting money into savings.  I'd say about $500-700 a month.  I put away a portion of each paycheck to cover the big expenses that come up over time (like insurance premiums, real estate taxes, etc.)  When the next big expense comes up, based on regular savings, I will have the money to pay it.

 

That kinda of savings, I could go on vacation!  (Havne't had one in years!)

 

That kinda of savings, I could move.  (Possible job move later this year. I'm months away from the possibility.)

 

That kinda of savings, I could have a spa day!  

 

That kinda of savings, ALL applied to the lower balance debt...and I could have it paid off in August 2016.

 

It's kinda exciting to think I have that much money saved.  *Happy dance*   And it's kinda exciting to think I could pay off one of the debts next month.

 

So what should I do?  Go on vacation, keep the savings, have a spa day, or apply it all to the zero percent lower debt?  Whatcha think?

 

 

 

Message 1 of 13
12 REPLIES
Frequent Contributor

Re: Having some fun...

Have a spa day.  A really, really fancy spa day.  And then buy yourself something stupid, like an expensive purse (or whatever you hestiate to purchase). Now you've had your fun, and got it out of your system.  Make sure that savings is in something that is earning interest.  Is that your emergency fund?  If it were me, I'd put 1/2 of it into something super stable, and the rest into a good fund.  Don't pay off 0% loans with that!  If you earn interest on your money it would cost you to pay off the debt. 

 

Now, if you are in a time limited 0% interest situation and you are about to be hit with a big chunk o'interest, then forget everything above and pay that ish down now!

Sept 15 -- All mid 400s
Jan 16 -- All mid 500s
Current: Knocking on 700s
Message 2 of 13
Community Leader
Super Contributor

Re: Having some fun...

The debts are at zero percent for now so don't pay them off just yet.  Having cash readily available is always a must incase of an unforseen circumstances.  Now with that out of the way, If I were in your shoes, I take a spa day.  Why?  Less expensive than a vacation and at the same time relaxing.

Message 3 of 13
Established Contributor

Re: Having some fun...

+1 to both of those. Have a little fun, but keep the bulk of that savings for a rainy day.



Giving up on the images for now

Stepped out of the garden 10/9/16

Message 4 of 13
Senior Contributor

Re: Having some fun...

I love the answers!  Lol - what does a spa day look like??

 

I have two CD's earning about 3% interest.  I am going to max those out next week.  (Meaning, put in the max amount.)

 

With my current plan, I will have the zero percent interest debts paid off before the interest rate kicks in.  Probably with a month or more to spare.

 

I'll try to find something earning a decent amount of interest to put the rest of the funds in.

 

So....really....what does a spa day look like?  And about how much does one cost?  Are there any that are over nighters??

Message 5 of 13
Valued Contributor

Re: Having some fun...

 

If you need a vacation or a trip to the spa, then you should go, but I wouldn't go just because you have the money to do so. You didn't mention retirement, so I would ask if you are already withholding $18,000/year for 401k/503b/etc? If eligible, are you saving another $5500/year for a Roth IRA? If the answer to either of those is no, I would say reduce your paycheck further by contributing to those and use your savings excess to help you reach the point where you are saving the max for both.

 

You cannot invest too much for retirement. Priority number one in my book.

 

Message 6 of 13
Established Contributor

Re: Having some fun...


IOBA wrote:

 

 

So....really....what does a spa day look like?  And about how much does one cost?  Are there any that are over nighters??


I have never been, but I have looked and dreamed. There are hotels that have spas. The cost depends on what services you select. It is kind of a la carte. I think some spas have packages as well.

 

But if you don't feel the spa day is right for you, a little weekend away would not eat up too much of your savings.



Giving up on the images for now

Stepped out of the garden 10/9/16

Message 7 of 13
Senior Contributor

Re: Having some fun...

Good points.  Thank you for bringing them up.  A spa day would be a little battery charge up for me.  I need something to recharge the batteries!

 

No, I am not maxed out on the retirement funds.  I struggle to do that when I have all of my paycheck budgeted, including the $500-700 a month savings.  Putting that $500-700 a month into savings and not sending it straight to debt is tough.  Really tough for me, but I am maintaining my course.  

 

When the debt is paid off, then I will put the max into retirement, if financially possible.  (It should be, but it almost all of the take home pay.  I know the take home pay will change since the tax picture will change.)

 

I am currently putting 10% of my gross income into retirement savings.  That is in addition to the $500-700 a month I personally save each month.  The last retirement class I took a few years ago said I would need between 1.1 - 1.3 million dollars to maintain my current lifestyle in retirement.  There's some formula that they use.  I have that saved in a retirement plan, assets, and savings.  Or darn close that right now.  In retirement, my monthly expenses will actually drop a bit.  (Less in real estate taxes, less in auto expenses, less in food expenses, utilities go up, and less in federal taxes.)

 

I wouldn't take a vacation just because I could.  Same with a spa day.  I'd do it for my personal health.  Sometimes a person needs to "check out" for a bit.  Staying at home won't work for me - too much to do and I would be work mode the whole time.

 

A few months ago, I was desperate to take a short (3-5 days) vacation due to burn out and to stress.  I had a small budget of 1k set up.  But I couldn't get the time away to go.  In my mind, a vacation to like Hawaii needs a 5k budget.  It doesn't have to cost that much, but by the time you count airfare x2, car rental (outrageously expensive, even with discounts/coupons), hotel for a week, food...easily 5k.  A local drive to vacation can be done for 1k-2k.  Lodging and food would be the biggest expense there.  A spa day - I haven't checked into what is available in my area.  Going in for a few hours a relaxation, "checking out", would be nice.  

 

Despite all the progress I have made towards my goals (on my way to 100k - made it!, getting a great place to live, etc) I still need some time to recharge my batteries.

 

When my batteries are recharged, it's easier to move forward, set new goals, work towards them, and to think clearly.

 

 

Message 8 of 13
Established Contributor

Re: Having some fun...


We all need to recharge our batteries now and then. I don't know where you live, but we are on the NW Florida coast so there are many places, beach and non beach, that we can drive to. It's how I prefer to vacation.

 



Giving up on the images for now

Stepped out of the garden 10/9/16

Message 9 of 13
Senior Contributor

Re: Having some fun...

I put almost 7k into CD's earning 3%.  That felt good.

 

Still looking into getting a massage or a spa day.  Smiley Happy  Not anywhere close to a beach...although I do have the HOT weather.

Message 10 of 13