Recently, Justin and I have decided that we are going to definitely want to build a house in the next two years or so. We have got to pay down debts and build up a good little piece of savings to cover down payments, furniture expenses, etc.
Now when I first bought my car, I was newly married, 6 months out of college with almost no credit history except for a credit card I maxed out before I even turned 19. As a result, I was able to buy my car, but only with Justin as a cosigner and with a relatively high interest rate.
After having paid faithfully on it for three years, I decided to refinance with my local bank. I was successful in cutting my interest rate nearly in half!
After that big milestone, I have become even more encouraged in paying off debts and getting “Operation: Forever Home” kicked into high gear. I vaguely understand the snowball method to paying off debts. You pay off your smallest bill, use the budgeted amount for that bill and apply it to your second highest bill and so on.
After looking over the Georgia Department of Community Affairs website for helpful tips for first time homeowners (which I will be—not Justin) I discovered Utah State University Extension’s Power Pay program. It is free to use. You just put in your monthly debt accounts, loan balance, and interest rates and it will prioritize your bills, roll over the payment amounts it recommends you pay each month, and even calculates how many months of payments you reduce and how much interest you save.
I have three loans I am paying on besides my regular mortgage. Here are my results:
I save $220 in interest alone and rather than spend the money on frivolous things, it encourages me to pay down my debt and it gives me 8 whole months of savings to sock away for a down payment.
I have never been so excited about paying bills!