This seems to be one of those things where the most important thing is to find a plan you can stick to, then stick to it. Having a plan–any plan–is better than none at all, and the best plan in the world isn’t going to help if you can’t bring yourself to stick to it.

At least that’s the conclusion I came to after Steve and I discussed (at length) the different tactics we’ve heard about.

Some people may opt to max out their 401(k) and Roth contributions before they pay off any debt at all. That’s not the strategy I took. But the person who does that certainly is way ahead of the person who saves nothing and makes the minimum payment on everything each month.

pay down the high interest rate debt first. Ihat will save the most money

I’ve found that the different strategies for debt elimination often conflict. A lot of it depends on your individual situation, particularly how your debts are distributed among your creditors. Paying off the highest interest debt first is certainly best when your debts are distributed fairly evenly. But if you’ve got $5K of credit debt and a $100K mortgage, odds are that – unless you have a very low mortgage interest rate and a very high credit interest rate – you’re going to save more in the long run by attacking the mortgage first, because the debt and aggregate interest loads are higher.

Your own personality is part of the strategy you settle upon, too. If paying off your smaller debts more quickly keeps you motivated, it’s probably best to do that rather than plod along on a long-term payoff and get off track.

As for the cars, I’m with you. My Honda was a year-old used vehicle. If I had it to do again, I’d have bought one that was a few years older. I bought that car for some of the wrong reasons but I still made fewer mistakes with it than I could have.

There’s a good mechanic a couple of miles from me who specializes in Hondas, and I’ve learned how to tune my driving habits so I can pretty consistently get 38 MPG out of my Civic. Now that gas has hit $2.50 a gallon, I’m about ready to experiment with high-efficiency spark plugs in hopes of squeezing out a little more.

I intend to put 200,000 miles on this car. That gives me lots of time to wait for what’s next. It’ll most likely be another Honda or a Toyota, mostly for fuel efficiency reasons.

"The only reason a great many American families don’t own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments." ~Mad Magazine

I agree with this thought. BUT, pay down the high interest rate debt first. Ihat will save the most money (which will be applied to the less expencive debt.

I don’t think that you have a sin with your mortgage payment. I do not believe that Christ taught that we should not provide for our dependents.

Give me a mail sometime,
John Vogt

One more thing: Find an honest trusted mechanic to work on your vehicle. Saves a lot of money and if you have a used import it is way cheaper than the dealer!

Good post with many excellent posts. I’m glad things are looking up for you and your wife, that is great!

A small observation that will allow you to save even more money (I know because I do it): I also eat oatmeal at work almost every morning and several years ago discovered that the packets of oatmeal are much more expensive, less tasty and filled with many additives compared to plain old fashioned Quaker Oats. Old Fashioned Quaker Oats (not one minute or instant or a store brand where the old fashioned oats are more like sweepings left over from Quaker) cook just fine when placed in a mug with boiling hot water poured over them, stir and let set for a couple minutes. Or, what I do now is microwave the oats for a couple minutes on high in a bowl, they come out fluffy yet with a good texture, fully cooked and ready to eat. Stir in some raisins, cinnamon, walnuts, etc for extra flavor. All told, healthy, more tasty and cheaper than packets of instant oatmeal. (I use a ratio of one part oats to two parts water. Also be careful when microwaving so they don’t boil over and out of your bowl).

On cars, I have never bought a new car but patiently wait for the right vehicle to come along. I currently drive a Mercedes 1989 300e in excellent condition that I bought in 2001… you’d be surprised how cheap these are once they get to around 10 years old ( got mine for a little over $6,000, the key is to wait for one that is well maintained, at a good price, and then be one of the types that rather spend anywhere from $500 to $2000 a year on quality maintenance instead of a lot more on a much more expensive new car. If you (and I don’t think you are but some people reading this will be) are the type that worries about the car being bad because ii needs new breaks, a new water pump, a new oil pump, needs to have the timing belt or chain replace, etc. then a new car may be the way to go, but for saving money find a good quality older vehicle and maintain it. My previous car, a 1977 Mercedes 240D I have had since 1991 (it’s currently the emergency back-up vehicle) and it still runs great and has nearly 300,000 miles on it! 🙂

That’s my two cents.

– Bruce