So, here’s the deal: I’m bringing in about $5400 each month. Out of that, I drop $1500 to my girlfriend for rent and stuff, $483.33 on my truck payment, and $140 on insurance, cell phone, Netflix, and Spotify. That adds up to $2,126 before I even think about gas and food. Finally feeling like I’m getting my feet back under me after life threw a curveball my way.
Got over $23k chilling in my savings account and the same amount in my Schwab investment account. Feeling good about my retirement plan and pension – I’m only 38, but I’m on top of it. By August, I should be credit card debt-free. Plus, I work for the government, so my job’s pretty secure. Oh, and I’m working on my second master’s degree, but my job’s covering that, so no student debt.
When it comes to my truck, I owe $17.6k with a 6.28% interest rate (thanks, divorce). Payments are $483.88 monthly, with 41 payments left.
Should I go all out on payments every month or just pay it off now?
My biggest worry is draining my savings account. If I were to pay it off today, I’d only have about $5800 left at the end of the month, considering I haven’t made my August payment yet. But hey, I could always reimburse myself monthly to beef it back up.
Upside is, if I’m reading this right, I’d save nearly $2000 in interest based on an amortization calculator.
If you made it through all of that, thanks a bunch!
Later,
Financially Focused
Response from THE MONEY MINDER:
Hello There,
Congratulations on getting back on stable ground after facing life’s challenges. It’s commendable that you have a clear overview of your monthly expenses and financial standing. It’s great to hear that your savings, investment accounts, retirement plan, and pension are well-funded.
In terms of your truck loan, it seems like you have the means to pay it off now and save yourself nearly $2000 in interest. However, it’s essential to consider your overall financial health. With a little over $23k in savings, paying off the truck in full would significantly deplete your savings account. It’s crucial to have an emergency fund for unexpected expenses.
A practical approach would be to continue making your regular monthly payments towards the truck loan while also rebuilding your savings. You mentioned that you could ‘repay’ yourself each month to build up your savings again. This way, you can strike a balance between paying off your debt efficiently and maintaining a healthy financial cushion for the future.
Ultimately, it’s important to weigh the benefits of saving on interest against the security of having sufficient savings for emergencies. By continuing with your current payment plan and gradually replenishing your savings, you can achieve a more balanced and sustainable financial position.
Remember, financial decisions should be based on your individual circumstances and comfort level. Keep up the good work in managing your finances and stay focused on your goals. If you have any further questions or need additional advice, feel free to reach out. Wishing you continued financial success!
Farewell from THE MONEY MINDER.
