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And yet again (debt reduction planning)

March 12th, 2016 at 06:48 am

Last year, having found stable employment after several years of instability, I decided to stop rolling debt from one balance transfer credit card to another. So first I got a personal loan, then later in the year, a home equity line of credit. I already had a small loan against my 403b account, so since November, I've been paying three loans plus a mortgage. I had incurred some additional expenses during the year, so I wasn't able to use the HELOC to fully pay down the more costly personal loan, only partially. With one more payment, that personal loan will be down to half the original balance. At that point, I'm going to take out another 403b loan at less than half the rate of the personal loan. Then I'll be back to two loans plus a mortgage. The 403b loan doesn't decrease my 403b balance, just possibly affects the balance in the annuity portion I have in the account. It's only 10k against a much larger diversified balance, so I'm ok doing that. I'll reduce my monthly debt payments and give myself back a little liquidity, decrease the interest rate on that 10k, and only add a year to eliminating the non-mortgage debt totally: 2019 rather than 2018, which still works in terms of my plan to pay off the mortgage and be completely debt free by 2024. I've been feeling a little pinched even with higher income because I have been aggressive about paying down debt. Time for a little more liquidity at the cost of an additional year.

On another money front, today I'm sending in a check to finish fully funding my HSA for the year. Means less into the Roth, but since I can pay my long term care insurance premiums in a tax-advantaged way this way, it helps on the taxes since I no longer qualify for a traditional IRA deduction.

1 Responses to “And yet again (debt reduction planning)”

  1. FrugalTexan75 Says:

    Good job on paying down the debt!

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