I've been thinking a lot about getting out of debt. In fact I'd say I've pretty much become obsessed with getting out of debt. Just check out the Pay Off Schedule for the Chase credit card and you'll see. Part of my initial planning was to treat our home mortgage like any other debt and get rid of it as quickly as possible. I see now that I need to adjust my plan.
If you want check out my question and Hank's answer (Opens in new window/tab): Reader’s Question: Should You Pay Your Mortgage Off First Or Invest For Retirement?
It's clear Donna and I have some re-planning we need to do so we'll be working on that while we continue to pay off our current debt.
How about you? What would you recommend?
Hi Zack:
ReplyDeleteI responded to the post on Money Q&A, but also wanted to let you know that the way to tell is by looking at your interest rate. In the case of your credit cards, the interest rate is likely high (above the average 8% return of the stock market), so it would be wise to pay those off first. However, with the mortgage (or a car loan if you have one), I would invest the money first since you'll get a potential 8% market return versus the 4.5% on your house. I have an example of this worked out on my blog if you want to check it out:
http://www.mymoneydesign.com/personal-finance-2/retirement/which-is-better-%e2%80%93-paying-off-your-mortgage-or-investing-the-money-%e2%80%93-part-1/
In any case, the simple act of trying to get out of debt is admirable!