Erasing Our Debt

Oh how I can't wait for 2008 to get here. Yes, we've still got some time to go to get there, but man am I ready.

Why, you ask?

More spare money to pay down debt.

How, you ask?

• I will be receiving a large check for tuition reimbursement from work. I expect this to be at least $2,000. They only pay 80% of your tuition to a max of $5,000 a year. I'm hoping to get all the paper work filed before 2008 so that it will count towards 2007 meaning I would still have the $5,000 to max out next year. While I debated about just putting that money directly back onto the student loans I had to use to go to school, I decided (through the help of some commentators on here) it would make more sense to pay off credit card debt that is at a higher interest rate. That pretty much makes it a balance transfer. I'll still be knocking out my debt as I normally do, this will only help. Once I get my credit card debt paid off, I'll have plenty of cash freed up to pay off the student loans.
• As of 01/12/2008, my wife's braces will be paid off. That will free up almost $200 every month. I'm debating on how to use that money. I want to put it towards her car payment and have her car paid off ASAP. But I also think it would serve a better purpose going towards our CC debt. I'm leaning towards the CC debt.
• With the new year comes renewal of benefits at work. I currently pay about $190 a month for a pretty good health insurance plan that covers the both of us. By pretty good, I mean that I've never received a letter from them saying they're denying me coverage for something as my previous health insurer did. I'm pretty sure the rates will go up, so I'm going to look into more plans this time. Last year, I just looked over this one and said sure I'll take it. I'll be looking into an HMO. I know, I know. Those are bad, right? But I do believe our current physician's are already used in the HMO. Should I go with the HMO plan, I could save about $100 a month on health insurance.
  I'll also be able to change our contribution to our Health Care Spending Account. Currently, I contribute about $270 a month. Of course part of this is for the braces, but we're still paying that out of pocket and waiting to get reimbursed everything at the end of the year. Believe me, it has come in handy this year with the pregnancy and then miscarriage. If we didn't have the HCSA, we wouldn't have had the money to pay for it. I'm planning on taking the contribution down to about $100-125ish a month.
  While our dental and vision insurance deductions might go up, they won't go up much. I currently pay about $35/month for the dental plan and $10 for the vision plan. That total of $45 may go up to $50. A $5 increase I can surely live with.
• Almost forgot! I will be submitting reimbursement papers for the braces payments at the end of the year. I suspect about $700-800 will be left in the HCSA, so that will be another big chunk of debt that will be out of our way!!

Of course, the drop in pre-tax deductions on my paycheck will mean more taxes to pay. But that's ok. It shouldn't be that much of an increase.

So here's the summary:

$200 payment from braces will be no more
$150ish reduction in our HCSA contribution
$100 reduction in health insurance deduction(should I choose a different plan)
$350-450 more to put towards debt each month

That will put us at about $1,000 each month going towards debt.

Then with the tuition and HCSA reimbursement money, we'll have another $2,800-$3,000 to knock off more debt.

With all this freed up money, I really need to run the numbers to see when we'll be (at least CC) debt free!!!

Labels: benefits, debt, extra income, HCSA, health, pre-tax deductions

In my current job, my employer also lays claim to loaning me money via the dangerous credit cards. Being that I work for said company, the employees get discounts on their products. For example we can lower our interest rate on our credit cards, get reduction of interest rate on a mortgage, etc.
Well I was browsing around our intranet I stumbled upon some FAQs on one of the credit cards they are promoting and the benefits we get for having the card. One of the questions was would we in the future have the option for having our credit card payment deducted from our paycheck. The answer provided was that this was something that was being considered in the near future.
First off, I would sign up for this in a heartbeat. Currently as soon as my statements come out, I log in to my account and set an auto payment up for the 15th since that is when I get paid. If I didn't have to do that, that would save me all of 5 minutes a month.
Now I'm sure this isn't possible, but how cool if your minimum payment that was deducted was taken out before taxes? That would totally rock.

Labels: credit card, minimum payment, pre-tax deductions