It’s 93, sunny but snowing in Virginia today!

Got paid today and based on my budget calculations I should be able to make my regular payment + $250 extra principal snowball!
Plus I ‘ve been scheduled for some extra time this week that will give me a little extra for next payday that will give me a few more snowflakes to pitch at it. But wait there’s more…
I just checked the mail and was notified I won a $150 gift certificate in a sweepstakes I entered! I’m thinking I’ll use that for groceries that week and throw another $150 on my car snowball.
On an OT note our rabbi’s on vacation and tomorrow’s my turn to give the layperson sermon at services…wish me luck.

Hurray!

The feeling of paying it down is what it is all about! Now the balance will look low enough that you will want to start throwing more more money at it to get it paid off by the end of the year.
Set a big goal and find extra money to get it gone.
Congratulations!

The option you mention would put me all at 6’s and 7’s

Right now I’m really gazelle intense ( selling off all our rendezvous stuff folks) so the temptation would be to go for it. However, having not so long ago finding ourselves so suddenly unemployed for 18 months and needing the accumulated vacation pay to get through our “unemployed time” I was very thankful we had the built up vacation time to help us along. I would be reluctant to give up that security blanket.
I also have to ask about the legality of you only getting 90% of your vacation time. What does fair wage and hour say about earned vacation time in your state?
As someone else has mentioned, what about burn-out? My mother was a nurse aide (I know you are a nurse) but the work for the two can be equally as draining. She really needed her vacation time for a change of pace.
So let me make an entirely different suggestion—I’m known for thinking outside the box around here.
How about taking some of that vacation time and doing an entirely different part time job for that time period? It would net you two incomes. The vacation time at 100% and say deliveries for the same time period as a fill in driver? OR take the time to go inch by inch through your home to find everything you could sell? If it’s not a violation of your contract, be a temp nurse for someone while their home nurse goes on vacation.
Even if the second temporary job would be delivering pizzas it would be a change of pace—something nurses need, and you would get 100% of your nursing pay, PLUS the income you would generate for that 2.5 weeks pay. Doing this idea could net you more for your debt than taking 90%.

Good luck, and welcome!

100 hours is about 2 1/2 weeks of vacation time. In trade off terms, that’s a pretty nifty trade to swap 2 1/2 weeks of your time and be debt free except for the house.

Having said that, when DH was let go from work in February he had just over 2 months of vacation. Between severance and vacation, we came away with almost 3 1/2 months of savings….and we needed that cushion to live on.

If you have extra vacation time beyond the 2 1/2 weeks, I’d say cash out the 100 hours. If you don’t, but your work allows you to switch shifts with someone in the event an emergency comes up, I’d still say go for it. Personally, I’d rather work for a year to accrue more vacation time than spend that same year (or more) paying off the car, especially when you could be debt free in the time it takes you to get the check from your company.

For me determining when to pay off would depend on a few things

Such as how much I make each month, how long it would take me to pay off the loan under it’s current terms, am I able to put more money into the loan each month, how much would 100 hours of vacation would reduce my debt, will I need that vacation time for anything else (like sick time, personal time, bereavement, etc..) would it make more sense to cash out some but not all….

I may have a differing opinion than others here. I think others would say do whatever you can and pay it off. And while I agree with it to a certain extent, I can’t follow everything MC says since some of his advice isn’t relevant in my world.

I hope I didn’t confuse you more.

My name is David, I’m a nurse from VA

I discovered MC Blog about 18 months ago. I’ve read TMMO, listen to his show almost everyday, but have not taken FPU.
Here’s my question:
Currenlty my only debt in addition to our home is my car loan. It’s $8600 with a rate of 4.9%. My employeer gives my the option of cashing in unused vacation time at 90% of our hourly rate. So my question…would it be worth cashing in about 100 hours to pitch at the car as a snowball? Or would I be losing 10% to save 4.9%?

Wow, I had a very similar situation with my son

I had to sue because of my son’s age. I had no choice. So you know who made money off that deal? My lawyer’s office. However, his staff did an excellent job. My health insurance paid for most, but because it went to lawsuit, they wanted their money back. Because the expenses were more than the lawsuit, they agreed to not pursuit any of the settlement, so that worked out.

So please, make sure the atty is pushing for them to (there’s a legal term for it, but I’m not sure what it is) not get their money. Of course they want their money back, but by the time your lawyer gets 1/3, there’s nothing left. As far as I know, my health insurance did not get reimbursed out of the settlement.

Sounds like it’s a done deal for you and your son. I hope he has no issues from this, and all is well. I opted to save his settlement for him until he is 25, instead of 18. I wish I could have held it back until he was 40!!!

So glad that your son is doing better

and I’m impressed that he is willing to get back on the bike and continue biking back and forth to school! Way to go young man!

Here is a story which was aired on our news station last night concerning negotiation of hospital bills. The man in the piece was bit by a snake. He is a reporter for the station and is of course, covered by insurance. The antivenin was $84,000 but see the negotiation tips which he employed to knock his bill down to something reasonable. If you need fast cash loans try RT Loans. I was struck by the insistence of the people in the story to make it known that EVERY hospital fee is negotiable. They run on a suggested price list, and no price is set in stone.

Knowing this, or learning this, I would believe that it doesn’t matter what your salary is, or what finances you’re working with, like you, it would behoove the patient and/or their financial representative to negotiate price.

Here are some more facts to make things more clear and maybe it will help

I won’t be paying a penalty for taking the money as we can get around that because it is a hardship withdrawal due to total disability. So that is a non-issue.

Also, income taxes will be very low due to income not being what is was. ; )

If we own a home we will qualify for tax breaks on money spent for retrofitting and can qualify for grants for certain items for our home up to 80% of their cost. The more I look at this the better it looks. I am certain that the financial benefits of owning and qualifying for breaks will far outweigh any income tax burden placed on us by taking the 401k money.

Also, I have looked into the particulars today and think if this was a plan to go with that I could take a loan on the 401K at 2% interest for up to $20,000 and then only take $20,000 hardship withdrawal. Houses here are actually undervalued and this makes buying a good deal. This would cost me a lot less in income taxes and would have me paying myself back at a very low interest. I would have to play with the scenarios to see which on works in our favor.

Quite honestly I don’t have any real solution other than to buy a house. Renting isn’t something that can be done. It sounds good but in reality it doesn’t work. I wish it did, then I could just leave everything alone. I am really trying to think of reasonable workable solutions.

In short, if I take money from 401K to buy a house I will incur no penalties or taxes, I will own a house outright and I will be able to re-fund our 401K in less than 5 years.

If we don’t buy we will not be able to find a suitable home to rent and we will have to consider placing her in an institution. We would not own a home and would pay rent forever (or until we can buy again), but we would have an intact 401k although without any additional contributions.

When I put it down like this all I can see is that at the end of 5 years I will be in a much better place and we will be able to be a part of our daughters daily live if I take money from the 401k.

Does this all still sound crazy ? Before this all happened when we were working our steps and paying down our debt snowball following each and every step in order make sense to me and since Dave’s plan was working so wonderfully for us I really wanted to stay on track with the plan but I am having trouble now because of our unique circumstances.

Just something to keep in mind

My only concern about pulling 401k money to buy a house or pay debt etc is from personal experience years ago when hubby lost a job and we pulled some 401k money and I learned a lesson months later. Money taken out of a retirement account not only gets the penalties, but also becomes taxable. You said hubby makes 60,000 a year—if you pull 50,000 out of 401k—they will charge you the penalties as you pull it—but then when you file your taxes—-it as if you made 110,000 this year. This could bump you into a higher tax bracket. It could also affect what you can itemize and claim, etc…..

Not a good plan for a home purchase

Robbing your 401K – which a bankruptcy doesn’t take on purpose because its important to have a retirement plan – is not the choice you want to make. Not to mention the 40% penalty you’ll acrue. If you have 100,000 in your 401K – you’ll walk away with 60,000. You’ll never conceivably make up that 40,000 loss.

I’m sorry I haven’t thought of a solution for you – I read your e-mail early this morning and I don’t usually like to write an answer without a workable solution but I thought it important that I stress how bad your plan is. I read your plight on renting and the need for accessible housing, but I don’t have a good answer for you.

We waited until our youngest was tall enough

to ride all the big rides. Space mountain and thunder mountain. I would have gone a few years earlier so ds who is in the middle could have gone when he was around 6or 7 but it just wasn’t affordable for our family of 5 to go when one parent and child would have to sit out of a lot of rides.

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