Tuesday, January 31, 2017

Frugal Living - January 2017 - Part 2


Here is my January big money saving idea!

My State Farm agent gave me a book on repaying student loans.  I read the entire book on a trip last year and got one big idea!  Everything else in the book was standard knowledge for me.  But this one big idea is going to save us in interest payments this year!

I have a student loan with a balance of 11K.  I'm so aggravated by this loan because it's just been hanging out on my budget for 16 years!!!  I've had so many other priorities and the payment is rather small so I've left it piddle in the background.  I've talked to professionals who say,
"don't let it bother you, the interest rate is low AND you get to write off the interest on your taxes"
But I want to have all debt paid off by the time we are 50, in 8 years, and I'm tired of paying on this loan.

So here's my big idea!

I'm already paying $100 extra per month on the loan.  What if I took out an interest free credit card for one year, and transferred $2000 of the student loan onto that card?  Then the $2000 for one year is not gaining a single penny of interest!  I'm now paying $166 a month + my student loan payment of $215.  If interest free credit cards are still available next year, I'll do the same thing, and again the year after until this debt is gone!

This happened after years of frustration in seeing my student loan balance barely shift after I paid $100 extra every month.

Full disclosure - I paid a $60 fee to move this balance to the new card but the card paid me back a $100 bonus after I spent $1000 in other expenses.  Total win.

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