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Post by leeann on Jan 15, 2011 15:26:45 GMT -5
Now..........work on the car and mortgage. I'd like ya'lls opinions. I'd really like to save about $6000.00 this year. This is nowhere near the 3-6 months the experts say you need but it sure is a heck of lot better than we are now. Now for me to do this, I won't be able to put as much $$ towards the car. I could pay an extra $100 towards the car and put $250.oo a pay period towards the $6000.00. Would you put all the $$ towards the car? The reason I don't want to do that is what if we need the $$? I don't want to use the credit card. Oh my, what a decision.!!  |
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Apple
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Post by Apple on Jan 15, 2011 15:32:37 GMT -5
I think the way you're setting it up sounds good. You're still putting extra one the car, but you're making sure to get a good savings going. After you have your savings at $6k you can focus more on the car payment. It's always best to have a nice cushion of cash.
Big congrats on the $0 credit card balance!!
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Deleted
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Post by Deleted on Jan 15, 2011 15:36:11 GMT -5
Congratulations on the $0.00 CC! I like having cash available too.
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Post by leeann on Jan 15, 2011 15:38:49 GMT -5
Thanks ladies!!!
Now it is time to get ready to go to the hockey game!! We are huge Carolina Hurricanes fans so we are going to watch them play the Tampa Bay Lightning tonight!!
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Post by Deleted on Jan 15, 2011 15:44:58 GMT -5
Now..........work on the car and mortgage. I'd like ya'lls opinions. I'd really like to save about $6000.00 this year. This is nowhere near the 3-6 months the experts say you need but it sure is a heck of lot better than we are now. Now for me to do this, I won't be able to put as much $$ towards the car. I could pay an extra $100 towards the car and put $250.oo a pay period towards the $6000.00. Would you put all the $$ towards the car? The reason I don't want to do that is what if we need the $$? I don't want to use the credit card. Oh my, what a decision.!! I would split the extra money ($350.00) in half. Half to the car 1/2 to savings! |
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Peace77
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Post by Peace77 on Jan 15, 2011 22:55:25 GMT -5
Great work! Congrats on paying off the credit card.
I suggest focusing on the savings. Put $300 per month to savings and $50 per month additional on the car.
This way, if you have an unexpected or unbudgeted expense, the funds will be there.
Keep this up until you have 6 months worth of expenses.
Then split the extra funds 50/50 between the car payment and savings until you have 9 months worth of living expenses in savings.
Then, If you still have a car payment, put all of the extra funds towards paying it off.
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motherto2
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Post by motherto2 on Jan 15, 2011 23:09:35 GMT -5
Congrats on the $0 cc! What an awesome accomplishment! I think you have a great idea about paying $100 on the car and the rest in EF. One question, do you have an account separately from the EF that takes care of nonrecurring expenses or expenses you don't pay on a regular basis? This would be money that you set aside for things like homeowner's association dues, life/car insurance if you only pay it every few months, auto expenses like yearly inspections, plate renewal, new tires, brakes, oil changes, etc. And don't forget extras like birthday/anniversary presents, clothing and such. If you set aside $ each payday for these types of things, then you won't have to use the cc's to pay for them.
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973beachbum
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Post by 973beachbum on Jan 15, 2011 23:20:19 GMT -5
Great work! Congrats on paying off the credit card. I suggest focusing on the savings. Put $300 per month to savings and $50 per month additional on the car. This way, if you have an unexpected or unbudgeted expense, the funds will be there. Keep this up until you have 6 months worth of expenses. Completely agree! If you shore up your savings then you will have choices if something like a job loss occurs. But if you pay down your car you will have a car with less owed on it but no cash to get your through one of life's unexpected occurrences. I would also shore up my EF and then when I have it at 6-9 months I would work on the car loan. |
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❤ mollymouser ❤
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Post by ❤ mollymouser ❤ on Jan 15, 2011 23:36:00 GMT -5
I agree with Peace77 and 937Beachbum  |
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Post by kristi28 on Jan 16, 2011 1:21:55 GMT -5
What is the interest rate on the car note relative to what you would get if you had to charge something to the CC? If they are similar, then I would send everything to the car note. Then, you save on interest if there is no emergency, and are about the same if there is. However, if the CC rate is much larger than your car note, I agree with everyone else.
Either way, Congrats!
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Peace77
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Post by Peace77 on Jan 17, 2011 18:54:58 GMT -5
Doesn't matter what the interest rates are.
If there is an emergency that causes the OP to miss a paycheck or two, it won't matter that there is less owed on the car.
If there isn't enough in savings, there may not be enough funds for the basics such as rent or food. It does not matter one little bit if there is less owed on the car. If enough payments are missed, the car will be repo'ed.
Best to make sure the EF (emergency fund) is solid first.
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Tiny
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Post by Tiny on Jan 18, 2011 22:21:50 GMT -5
I think you need to consider the interest rate and the remaining balance and the condition of the car in order to make a decision.
It's a bit of a balancing act - if you have a high interest rate (6% or more) AND 24 or more months to pay off the car (as scheduled) AND the car will be nearing the end of it's life (10 years old or more) if you pay as scheduled - you might want to do a 60/40 split between car loan paydown and savings.
If the car will be be 7 or 8 years old when you finish making regularly schedule payments, and if the interest rate is less than 6% (or even 7%) and you've got 36 or fewer payments - you might just want to continue with payments as planned - or maybe round up your payment for the "Feel Good" and then shovel everything into savings.
Being debt free is great and all... but having CASH/SAVINGS is a much better place to be. Cash/Savings gives you flexibility. Being debt free with no cash/savings doesn't really give you flexibility.
FWIW: I'd probably do something like choose a date when I wanted the car loan to be paid (turn a 5 year loan into a 4 year loan for instance) calculate out the payment amount that would get me there... and then make that payment - set it and forget it. I'd then focus all my attention on building savings/retirement/whatever... I'd review this plan every year.
I wouldn't paydown the mortgage - unless you are really underwater or have a terrible interest rate (over 6%). If you have a HELOC I would go after that - the generally feeling is that interest rates will rise in the next 2 years and depending on how big your HELOC is it could get burdensome.
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