DISQUS

Consumerism Commentary: Paid Off a Chunk of Debt This Week

  • FrugalTrader · 2 years ago
    Hey Flexo, yea it doesn't make sense to keep a whole bunch of cash in your savings account when you have non-ded debt on hand. Considering that the interest earned on your savings is taxed as income, and paying down your loan is like an after tax return.

    For example, if your savings account paid you 5.5% @ 40% marginal tax rate, your after tax return is: 3.3%. If you pay down your student loan, your after tax return is 4.25%.

    FT
  • askprofit · 2 years ago
    Better to pay off debt..it will be worth it in the long run. Good for you!
  • paidtwice · 2 years ago
    Congrats on paying off a chunk of debt! That sounds awesome :)
  • The Dividend Guy · 2 years ago
    That is always a pretty good feeling to do that - it is more psychological than anything. Just don't celebrate by buying a new TV with debt :-)
  • Flexo · 2 years ago
    DividendGuy: Heh. No, I already bought my new TV (but not with debt).
  • Clever Dude · 2 years ago
    Congrats on getting rid of that debt. The student loans were next on my list before buying my wife a Mini. But we'll have that paid off before January and then get back to the student loan payoff.
  • Patrick · 2 years ago
    Awesome! Congrats on the big payment. I think a lot more people will start doing something similar in the near future.
  • Colin · 2 years ago
    That is awesome! I did the same thing this week thanks to the dropping interest rates. I managed to take out around $13,000 of my student loan. Not too much longer....
  • Mrs. Micah · 2 years ago
    Congrats! That must have taken a big bite out of your debt. :-) It also sounds wise, considering the situation.
  • thomas · 2 years ago
    luckily my loans are below 3%. I'm really in no hurry to pay them off. My wife's on the other hand is a totally different story. She's stuck w/ a variable rate and it's super high right now. I'm actually trying to dump the amount onto a fixed rate credit card b/c of the difference in payment. The tax benefit of her loans isn't worth it.
  • Flexo · 2 years ago
    Thanks for the words of encouragement, everyone!