Saving Money

Last year I bucked the trend and spent my government stimulus check, albeit to pay off an existing debt. But that's one less monthly payment I have to make so it was well worth it.

This year, in addition to having to pay for glasses, contacts and a contact lens fitting, I have other medical bills to pay. I do have a healthcare savings plan, but underestimated the amount of money I would use; it's a use or lose benefit which I've never used when offered previously. I put what seemed like enough money to pay for glasses in the account and it isn't enough. Which is fine; this is just another way of using pre-tax dollars. I'm waiting for my debit card, which will have $250 free dollars from my employer on it in addition to my payroll deductions. The additional money would carry over, but there's no reason for me not to spend it on medical expenses since I have plenty of them.

While I'm saving for retirement through paycheck deductions, I need to increase my savings which is difficult. Right now I'm so focused on getting rid of the random bills that I've incurred recently that I'm not nearly as concerned as I should be about saving money. They say you should have the equivalent of 4-6 months expenses in savings. At the rate I'm going, that'll take me forever to achieve. Especially since I want to reduce my debt.

What I need to do is sit down and create a budget for myself and figure out if there's a way for me to achieve my goals of a) cleaning up my new, annoying medical debt; b) not carrying a balance on a credit card in order to do so; c) reducing my overall debt and d) increasing my savings.

My federal student loans are at a fixed rate and are unfortunately are the highest interest rate I have; however, the rate is much lower than the one I had for my undergrad loans. When I consolidated it seemed better to get a fixed rate loan because the rate I got was the lowest ever at that time. Now it isn't.

My other loans are really at a negligible rate of interest, differing by about .25 from one another; they both just recalibrated and got lower. I could decide that with such a low rate of interest I'd be better off not worrrying about paying extra on either of these loans and merely pay off my other debt as quickly of possible and put more in savings until the interest rates on these loans goes up again. That might be the most practical thing to do instead of worrying about getting the smaller one paid off sooner; the same payment at a lower interest rate will reduce principal by a slightly higher amount each month.