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Advise on payoffs

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I am a complete idiot with money. There, I said it. I think I have a plan but want to run it through this forum.

I am about to get a settlement maybe next month and I have some debt I would like to take care of with it. Last time I spoke with my attorney, he thinks I will walk away with about $20k. That more money than I have ever been given at one time, and I'd like to be as smart as possible with it.

I currently have two personal loans out and also have a car loan. One loan is a personal loan we used to get my step son a car, the second is a personal loan I used to renovate the house. Like I said, I am stupid with money.

The home renovation loan still has a $14k balance and I still have 50 payments left. The interest rate is 15.24% and the APR is 18.07% and the monthly payment is $381.47.

The loan for my step son's car still has a $4k balance and I still have 31 payments left. The interest rate is 23.05% and the APR is 27.71% and the monthly payment is $174.32. My step son makes that payment monthly.

My car loan still has a $10k balance and I still have 35 payments left. The interest rate is 10.64% and the monthly payment is $364.98.

Here is what I am thinking; take the settlement and pay off the two personal loans for the home renovation and my step son's car. But I am still going to have my step son continue to make the payments and put that money into a savings account he can have to take with him when he goes to college.

But I am also thinking maybe pay off my car loan instead of the home renovation loan so I can have it free and clear, and continue paying the renovation loan payment but double up on it to pay it off quicker. I think that might be the way to go in case I were to lose my job or get hurt and not be able to work, I would at least still have transportation.

I am completely embarrassed about my past decisions, but thought complete disclosure would help any of you financial wizards give me some solid advise. My main desire with this money is to pay off this debt as smartly as I can. What do you guys think?

I'm curious what you decided to do.

Those are stupid high interest rates. Need to work on your credit score. By all means pay off what you can. Couple weeks ago I had to buy tires for kids car. Used Goodyear credit card. $200 rebate and 6 months same as cash. Got the first bill. After 6 months intrest rate is 28%. I will pay off way before then. Wonder how many people don’t.
Enough people that they can afford the promotion and make a profit.
 
Before COVID hit I was stupid with credit cards and ran up 3 of them. I was also hiding it from my wife. She of course found out and we nearly got a divorce, which was justifiable. However, it made us take a long look at our finances. I was laid off from my job, but working as a pizza delivery guy 7 nights a week, and still getting unemployment from my job I was laid off from. We took the COVID stimulus money and paid off 2 of the credit cards. We saved all the cash tips and paid off the last credit card. We then turned around and paid off my lawnmower. We are almost ready to pay off the last personal loan. The personal loan and her car loan are through a local credit union. Once the personal loan is paid off we can attack her car and have it paid off by February. The debt snowball works for sure. I am back at work now, and about to start a better job, but I still work at least 1 night at week delivering pizzas.
Man I can relate to this. I tip my hat that y'all came together to form a solution and are working toward that. This will draw y'all closer than ever.

Good luck on your new job.
 
Definitely have a plan. Sit down and put it on paper. Otherwise you will spend a little here a little there and in the end find yourself in the same spot.

I honestly don't think I am going to spend any of that settlement money, as there is nothing I am personally wanting right now. Plus this debt is eating at me and I want it gone, and I am very motivated to get it gone.

As of right now, my plan is to work as much over time and part time jobs I can and put all that towards the big loan. So far I have knocked a couple of thousand off that principal. Once the settlement money gets to me, I will then re-evaluate my situation. Number 1 is to put $5k into some sort of IRA. Then I will pay off the rest of that loan, then pay off the personal loan for my step sons car. As much as I have knocked off the big loan, I think I should have a couple of thousand I can set aside as a rainy day fund after I do all that. I will have my step son keep making the payments as he is now but I will use that, plus the money I was using as a payment to the big loan to pay towards the principle on my car note. The way I have it figured, the big loan payment is a part of my budget now and I am used to it being gone. So I might as well keep using it to better my situation.

Once the car is paid off, I will be debt free except my mortgage. I want to start putting extra towards that cause I want it gone as well. So my plan is to take the big loan payment + car payment + the money form my step son (if he is still having to make it at that point in the future) and put that monthly towards principle on the mortgage.

However, all that is fine and dandy until something comes up like it always does. It's like Mike Tyson says, everyone has a plan until you are punched in the face. I am hoping to bob and weave and have a few things not hit me in the face, but it seems always that something nails me, such as it is with life.
 
Sounds like you have a plan

Yeah, but to be honest, the whole IRA thing is just a way to help me out on taxes. Every year I do them, they are always "you know, if you have one of these, you'd be getting this much more back on your federal tax return." I am not sure if that is the IRA or what, plan on asking my guy at Edward Jones what he suggest. I just know every time they bring it up, you need $5k to open one. And with 4 kids in the house, it can take years to get to $5k. And the few times I have gotten close, I get punched in the face. LOL. So I would like to use the settlement to jump start one of those, if it makes sense to.

As far as retirement goes, I am pretty set on that. I do not have a hefty savings account to fall back on, but have been putting money into several things that are going to pay back very well. I will not be rich mind you, but I will be comfortable.

What do you guys think? Is it worth $5k to open something that I am strictly going to use as a tax deduction? And I am guessing you cannot open one and just leave it as is. I will have to make deposits to it right?
 
Dude, you are all over the place.

I struggle to follow. You are asking what you should do with $20k, have listed 28K in debt with interest rates nearly double the average S&P returns, you have an Edward Jones guy, are all set for retirement, and wonder if you should open an IRA to save on taxes?


What assets do you have? What debts do you have? What was your taxable income last year? It shouldn't be a complicated question or answer.
 
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