What would you do with an extra $100 a month?

May 19, 2006 7:10 AM

I'm quitting cable. What should I do with the money?

Cable bill = $100/month.

Financial situation:
- No credit card debt
- 30 year mortgage
- 6 year auto loan*
- Small emergency fund**
- Decent 403(b)***

* On month two (of 72) for a 20k (6.5%) auto loan -- payment is $350/month.

** Dutifully contribute $250 each month to the account, but due to an emergency repair last month, there's only a grand in the account now.

*** Currently contributing 12% of income, age 27.

Please offer creative, conservative and/or off-the-wall suggestions.

posted by 10ch to work & money (22 comments total)

Add it to the $250 you're putting away in the emergency fund?
posted by slater at 7:13 AM on May 19, 2006

72*350=25200-20000=$5200 in completely wasted money just to own your car. Start making double payments ASAP. Five grand for nothing would bother me, especially since your terms are for 6 years.
posted by SeizeTheDay at 7:16 AM on May 19, 2006 [1 favorite]

You know you're going to be upside-down on that car loan (if you aren't already). The tendancy would be to pay more on the car, but consider it a lost cause and add the $100.00 to the 403b or open a ROTH IRA
posted by Gungho at 7:17 AM on May 19, 2006

Unless the money you're saving is making 6.5% (which is possible), you're wasting money with a 6! year loan on those terms. Pay it off ASAP.
posted by kcm at 7:18 AM on May 19, 2006

Add it to your retirement, by means of automatic deduction, before you ever see it. By the time you are 65 this will be a mountain of cash. You will be drinking wine at a hilltop villa in Italy thinking, "Damn, I'm glad I gave up cable."
posted by LarryC at 7:19 AM on May 19, 2006

cigarettes!
posted by delmoi at 7:19 AM on May 19, 2006

I'm reluctant to offer this suggestion after reading the fiscally-responsible ones upthread, but if you imagine yourself being deprived for entertainment and thus having trouble sticking to the no-cable plan, you could spend some of the dough on a Netflix account, or on buying a couple DVDs/CDs/videogames/whatnot a month, or even on a faster Internet connection or a cellphone data plan or something.
posted by box at 7:39 AM on May 19, 2006

Spend half of it on upgrading your internet connection, download TV shows via bittorrent. Put the other half in savings, once you have enough, pay off the car loan all at once.
posted by blue_beetle at 7:42 AM on May 19, 2006

Follow-up to entertainment suggestions: Thanks for the replies... We already have Netflix & work pays for high-speed internet.
posted by 10ch at 7:49 AM on May 19, 2006

Outstanding that you are saving 12% of your income! You should pat yourself on the back for that before you do anything else!

Also, cable is a waste, IMO and abandoning it is prudent.

Also IMO, renting money sucks, unless you get it cheaper than you can get returns on money you pay it off with.

Two things... leave the mortgage at 30 years, but each month, pay next month's principal. Right now, it's only a few dollars and it will be years before it is 50%. It will pay off your mortgage in 1/2 the time, and you can always elect to skip a month if you get in a financial bind.

On the car, pay it off ASAP. Take really good care of it, and make it last 10 years or more, then buy used.

The 'value' of something is the minimum cost that can achieve the function. Every cent above this is emotional. Your need is for safe, reliable and available transportation, probably. Is the car you have providing more? Status/image? Convenience? Safety? A BMW doesn't transport you better than a Civic. And a new Civic doesn't transport you better than a slightly used one? Which makes better sense?

Congratulations on the savings plan, again. Very impressive!
posted by FauxScot at 7:52 AM on May 19, 2006 [1 favorite]

Do you have high-speed internet through your cable company too?

I decided to eschew cable tv a while ago, but I found that keeping the most basic cable tv service (nbc,abc,cbs... and PBS) gave me a discount on my cable modem that was greater than the cost of the basic cable service itself. ($13 basic cable tv, $15 discount for having high-speed and cable tv)

So, by keeping the basic cable, I actually saved money when compared to having a cable modem and no cable tv. Your cable company might also offer this same incentive.

(on preview, I see that someone else pays your internet, but others might find this useful)
posted by jsonic at 7:53 AM on May 19, 2006

Oxfam America?
posted by ed\26h at 7:54 AM on May 19, 2006

Join a gym?
posted by small_ruminant at 8:40 AM on May 19, 2006

Splurge on something awesome. Then pay off any debt more quickly than you are now.
posted by desuetude at 9:00 AM on May 19, 2006

First month: buy used musical instrument

Following months: buy lessons

Thus you replace some of the enterainment value from cable. Plus, you eventually make it revenue neurtral by busking in the subways.
posted by mikepop at 9:02 AM on May 19, 2006

oops, neutral
posted by mikepop at 9:14 AM on May 19, 2006

$1000 in your emergency fund? You simply cannot do anything else till you get that back up, including pre-paying on that car loan. If you were suddenly unemployed you couldn't make 3 months of payments on it, much less mortgage payments.
posted by phearlez at 9:39 AM on May 19, 2006

What kcm said. That long-term auto loan is a black hole for money. It's not like a mortgage, where you gain equity as you pay it off. With a six-year car loan, what you get at the end is a six-year old car. Pay it off as fast as you can.
posted by Kirth Gerson at 10:33 AM on May 19, 2006

Lend some of it to developing world entrepreneurs via kiva. Say, 50$ per month means every two weeks you could make a loan, and soon you would be following a few dozen businesses and helping end poverty. And, you get your money back in the end.
posted by Rumple at 11:03 AM on May 19, 2006

There are isolated cases in which the cable company doesn't bother to turn off basic cable if you retain cable internet.
posted by Mr. Gunn at 11:15 AM on May 19, 2006

Congratulations on ditching the cable. I was raised without it and I've never felt deprived. On the very rare occasion that some channel shows something I *really* want to see, I get a friend or relative to tape it. And I mean rare - it's happened once in the last 5 years.
posted by IndigoRain at 11:29 PM on May 19, 2006

Oh yeah, I ditched cable, which also killed off free to air TV in my house. The question is not just what to do with the money you recover, but what to do with the TIME.

I, using all of my wits to think of something challenging and productive, started playing World of Warcraft.

Yeesh.

However, not having cable or free to air TV has made me happier I think. When I want to watch something, I do it when I want to, without ads. You could use the money to buy season collections of any TV shows you like.

I agree with all the above though, put at least half of it into your car loan and pay it off ASAP.
posted by tomble at 3:03 PM on May 20, 2006