- May 27, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Evaluating Financial Situation and Considering Payoff Options
I recently found myself exploring the unburyme website and it got me thinking about the possibility of paying off my truck and RV to eliminate interest payments. Historically, I have been a diligent saver without a clear financial strategy. However, my wife and I have recently delved deeper into our finances, utilizing the TMOAP budget sheet to meticulously track our expenses and income.
## Current Financial Status and Background
As full-time travelers working on various projects at different job sites for 6 to 10 months a year, our income typically ranges from $100,000 to $150,000 annually, with an additional tax-free stipend of $20,000 to $30,000. This year, my take-home pay amounts to approximately $68,000. In the past year, I made a significant purchase of a Mazda for my wife with a $10,000 down payment in February, and we have already allocated $4,500 for a vacation in July. Our monthly expenses typically total around $4,500.
Considering our financial goals and the potential benefits, one option we are contemplating is paying off the truck to effectively save on interest payments and reduce our monthly expenses by $1,000. Additionally, we have been exploring the concept of coast fire strategy to achieve financial independence. At 26 years old, with my wife being 24, we are eager to make informed decisions regarding our financial future.
## Assets and Debts Overview
Our current financial portfolio includes:
– $52,000 in Taxable Brokerage (75% VOO, 25% cash settlement fund)
– $16,000 Maxed Roth IRA (100% VOO)
– $15,000 in Checking account (typically transferred to Brokerage for investments)
Debts include:
– $35,000 Truck loan at $866/month, 8.76% interest rate for 5 years
– $15,000 RV loan at $300/month, 7.7% interest rate for 10 years
– $16,900 Mazda loan at $522/month, 3.99% interest rate for 3 years
## How AI Legalese Decoder Can Help
Using AI Legalese Decoder can assist in analyzing the terms and conditions of the loan agreements for the truck, RV, and Mazda. By accurately decoding the legal jargon and complex language often found in financial documents, this tool can provide valuable insights for making informed decisions about paying off these loans. Additionally, AI Legalese Decoder can help in understanding the implications of different payoff strategies and determining the most advantageous financial approach. By leveraging this technology, individuals like us can navigate complex financial scenarios with clarity and confidence.
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Yes it makes perfect sense to payoff your high interest auto loans on your truck and RV as early as you can. Not only you save on the interest, but also would help with your monthly cash flow which you can use to beef up your investments.
Not related to your question but tip for next time that works for us. We have always had one car payment and we don’t buy another car until the payment ends and even then we wait until the car is on its last leg. I know easier said than done since cars can give out. We typically also buy used cars. But whatever you do, just avoid spending $1k on car payments.
It sounds like you have a variable work schedule? If I were you, I would beef up your cash reserves. Most industries, projects will dry up at the same time that markets fall. You don’t want to have to sell your VOO when it’s down, and you don’t want to be facing capital gains taxes when you have less work.
For project based work, you may want 6-12 months in high yield savings. Once you have good cash reserve, it’s time to pay off that 8% loan. Guaranteed return that you aren’t taxed on.
Curious about something. What about paying off 25% of the truck and camper. All the interest is on the front of the loan. Would this essentially bring the apr down?
RV paid off this year with your stipend, then go after paying the truck off aggressively with the stipend. That’s typically what the stipend is for. I talked to a local GC here who was technically traveling because he lived 3.5 hours from the job site. He bought a 20k camper and paid it off in a year with his per diem. I wouldn’t take money out of your investment accounts, that withdrawal will be taxable and you’ll lose a good chunk of additional money that way.