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I won't be sunk, because my mortgage contract set out below:
I borrowed $351,000 at 5.79% its interest rate is fixed for 2 years. I went for a 30 year term loan.
My minimum repayment is $950 fortnightly that is $1,900 monthly, but I am paying $2,900, that is $1,000 more than I have to pay which means i own the house in 13 years times not 30 years time!
I won't be sunk, because my mortgage contract set out below:
I borrowed $351,000 at 5.79% its interest rate is fixed for 2 years. I went for a 30 year term loan.
My minimum repayment is $950 fortnightly that is $1,900 monthly, but I am paying $2,900, that is $1,000 more than I have to pay which means i own the house in 13 years times not 30 years time!
Got a cell phone? Dump the land line or switch to a VOIP if no cell.
Call see if you can get discount on Internet service and TV service.
Any money saved throw it to the emergency fund WITH the surplus
Save at least 3x (preferably 4-5 months) amount of your monthly nut for rainy day.
Once you got 3x saved
Use 3/4 the surplus to kick the student and CC debt. Then once done don't use CC unless a TOTAL emergency comes up. Save the rest and upping the savings and emergency funds.
Once debt free take 1/2 the surplus keep saving it. Take the other 1/2 and add it to principal payment every month. Or 3/4 save 1/4 principal. That's up to you.
Reason I say you need to build the hell out of savings and dump the debt is because without ROOMATES you will sink. That's not a good position to be in. Build the savings, dump the debt then start saving and put extra to principal.
+1 on this advice. Your home is your best investment.
I know NZ has limited options but can you do anything on your salary ? That is quite low. Almost any job involving sales will pay more than that.
Are you currently living in New Zealand? I think most of us are coming from a US perspective which explains our bewilderment. I would say whittling down your credit card debt and starting to save a 6-month emergency fund should be your first priority, no matter where you live.
Should I use that surplus and save for a emergency fund or should I put half of that into paying down the house mortgage.
The rest aside... why would you pay down your mortgage before tackling your other two debts? I am seriously asking if you think there is an advantage to paying towards your mortgage versus the other two.
Knowing what I know about US financial system. The mortgage interest can be written off on your taxes which is why you would not want to pay down that prior to the other two. Especially since the credit card probably has an interest rate of 12% or more.
So in my opinion, pay down the credit card debt FIRST, then tackle the Student Loans and then finally your mortgage.
Yes, I would spend any extra income you can possibly save or produce into paying down your debts. Also, let us know what your financials look like with the credit card and student loan payments. break it ALL down otherwise our advice is not going to be accurate.
There is nothing wrong with my income. I forgot to add in i pay $211 a fortnight on my student loan and $78 fortnight in Kiwibank Saver which is like 401k?
I don't pay interest on Credit Card Debt. I deposit money into a sport betting account and withdrew it to pay the debt in full during the month.
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