Quote:
Originally Posted by toy71camaro
Thats always been a tough topic. Whether or not to snowball the debt vs retirement.
Dave Ramsey says to attack the debt in full force (everything BUT the mortgage), and do NOT contribute to retirement. It should be a "short time" before you're debt free then hit retirement with a full 15% of your income.
The challenge to that is, what if I'm capable of making 7-12% on my investments/retirement while only paying 3% on my auto loans. I still come ahead 4%.
But, i think its more a comfort feeling myself. I hate payments. I hate owing every month on a car payment. So my feelings tell me to pay the damn car off ASAP. Even if it means i'm losing that 4% possible gain (or whatever it is. you never know).
Personally, we just bought a new to us vehicle. Most expensive thing ive ever bought aside from the house. I've got a 3% interest rate on it. We've got the money to still fund my Roth AND pay the normal note on the car. I'm torn at taking that ROTH money i set aside each month and tack it onto the car payment. But, that makes me nervous. LOL. So, as it sits right now, I'm paying the normal note on the car, stashing the ROTH money in a separate account (but NOT directly into my Roth), so I have wiggle room. If for some reason the market goes south and offers a huge buying opportunity, i have that money ready. If not, I'll let it pile until I can just dump it onto the car and be done with it. No clue if thats the best way to go. But it makes me sleep comfortably at night having that "second emergency fund" just for the car.
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I had been using a Dave Ramsey-esque approach. We have our monthly budget, and WERE snowballing, but at the same time I had maxed my 401k
we were doing well, but now with the new job and this old 401k, its pushing me into new areas of finances I have never dealt with before