Need Help From You Financial Experts Please!

[Waiting2go]

Okay, I really need some help from you guys that really know finances. After crunching numbers for the past 2 months I thought I had it figured out and now I am just not so sure. This is my situation:

My vehicle is due to be paid off in July (finally!!!!) - plus, when I pay it off, I will be able to lower my car insurance by $50. With my income tax refund I had planned to go ahead and pay it off now and use that freed up money (car payments) towards other debts. Some of them are not that much with fairly low interests rates and payments. A couple of them are larger with higher interest rates and higher payments. I want to knock things out as quickly and smartly as possible. So........my question is..........would it be smarter to pay my vehicle off now and pay off other things a little slower or knock out most of the lower end ones now and still have a couple of those higher end debts and pay out my vehicle as normal? I hope I made sense.

I have prayed and prayed about this and thought I had this figured out, and now I am questioning if I figured it out right or not. So, I thought I would ask you guys that are experts (I am so not!) and see what you thought.

[dramama]

what is the pay off on the car now verses in july....will you save any money paying it off now or are they going to get their interest either way? If there is no difference pay it off in July. Which card or debt has the highest interest rate? Pay that one off first while still paying as much as possible on the other ones (no minimum payments, always pay something more even if it's two dollars) you also might end up with a few extra bucks this year to put towards debt if the stimulus package has a rebate in it....don't spend the rebate on goods unless it's something you really need...it's better to put it towards debt and be debt free...then you can work on savings! Not fun but oh so comforting and secure!

[Waiting2go]

what is the pay off on the car now verses in july....will you save any money paying it off now or are they going to get their interest either way? If there is no difference pay it off in July. Which card or debt has the highest interest rate? Pay that one off first while still paying as much as possible on the other ones (no minimum payments, always pay something more even if it's two dollars) you also might end up with a few extra bucks this year to put towards debt if the stimulus package has a rebate in it....don't spend the rebate on goods unless it's something you really need...it's better to put it towards debt and be debt free...then you can work on savings! Not fun but oh so comforting and secure!

:heythere Sending you a PM. And, yes I was planning to use that rebate (if I get it, which I probably won't) to use towards debt as well. I am trying so hard to become debt free as soon as possible.......I see very bad times ahead. Due to circumstances beyond my control, I got into debt and want out.

[Tall Timbers]

Pay off whatever has the highest interest rate first, unless of course, paying off something else, like your car, allows you to lower costs in some way... enough to make paying off that debt more better than paying off debts with higher interest rates.

Food for thought. As soon as you become debt free, start making car payments to yourself for the next car you will need down the road... that way, when the time comes, you can pay cash for it.

[FarmBoy]

I think the case might be stated for not pursuing the highest interest rate first but retiring the lower balances first. By retiring the lower balances first those monthly payment amounts can be rolled into paying the next card off.

If you use the money to pay off a portion of the higher interest card you may lower the balance and monthly payment but not really affect your overall monthly obligations.

You'll need to do the math and see which makes better sense to you.

[Tammy]

When we did a Crown Financial class we were told to pay off the lower balances first and then use that money and work on the next lowest one.

[Nova]

Check out www.daveramsey.com There are good suggestions. He recommends paying off debts smallest to largest, because it help keep folks motivated. But any plan where you knock out debt, then roll those dollars into knock out another debt is fine. If there is an added advantage to paying the car off first, I'd start there.

[Waiting2go]

I just wanted to say thanks to everyone for your help and advice.

[Joseph The Carpenter]

Pay off the smaller amounts first. When you are debt free (except mortgage) start saving for the next car, even if you need a car loan it will be smaller.:hug

P.S. Make sure you have six months living expenses for an emergency.:wave

[firstoftwelve]

My advice would be to pay off the smaller amounts first and get them out of the way. Then hit the bigger ones harder w/ the extra money you were paying on the others. you'll feel so liberated as you eliminate the number of bills coming in.
However, It's not unreasonable to pay off the car first though and get a reduction in insurance to use towards your other bills. Whichever you feel the Lord is leading you.
good for you for wanting to take these steps toward being debt free. You'll receive many blessings for doing it.