mad anthony

Rants, politics, and thoughts on politics, technology, life,
and stuff from a generally politically conservative Baltimoron.

Monday, February 25, 2008

Financial management...

So last week, I got my tax refunds - federal and state- deposited in my bank account. So a few days ago, I did something I had been wanting to do for a while - paid off my truck, 3.5 years early.

Upside - one fewer $283 payment every month. Downside: a whole lot less money in my savings account. I do have second savings account, with an online-only bank (to make it harder to access, plus higher interest) for emergencies, so it's not a big deal - but it is still comforting to log in and see a bunch of money in there.

I had three big loans - the truck loan, my mortgage, and a student loan. My logic on paying down the truck loan was that it was the only one where interest was not tax-deductible.

The next thing I plan on attacking is my mortgage. In a way, this is counterintuitive - mortgage interest is tax-deductible, while my student loan interest is capped at an income level - and because mad anthony just rakes in the money, as evident by his flamboyant lifestyle, I am able to deduct very little. However, I am currently paying PMI on my house (Private Mortgage Insurance, because I put less than 20% down), and I would like to get rid of it. That would save me about $85 a month, and I can drop it once the amount of the loan drops to 78% of the value of the house. That's going to take about $20,000 - a fairly significant sum, which means that this goal will be much harder to reach than paying off the truck. I also have a few minor things I want to do around the house, like get the backyard fenced in, which will cost money. Still, if I throw all my extra money at the mortgage, and if I can make some extra cash with overtime and eBay and hamfests, I'm hoping I can get rid of PMI in the next 2 or 3 years.

After that, assuming no big lifestyle changes that change my spending preferences, I may start to think of spending money on myself. I've long entertained the idea of buying a second vehicle - something pre-owned, sporty, that I could drive on nice days. The current object of my affection is the Ford SVT Lightning, although finding one in good shape in a couple years may be tough, and they are still pretty pricey.

Of course, the prudent thing to do once I've paid off enough of the house to pay off PMI would be to pay off the barely-deductible student loan. But - and this would probably make anyone who is frugal with their money cringe - I feel like if I can successfully pay off an extra $30,000 or so in debt (in addition to regular expenses and debt service), I deserve to treat myself - after all, you only live once. Unless you are a cat, which I'm not.


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