Question

My Jeep payment is our last debt besides our mortgage. We are getting just over $4000 back for our taxes. I am leaning more to putting it into our savings account vs. using it to pay off the Jeep earlier. We are putting $150 extra onto each car payment which will pay off the Jeep over 2 years earlier. Putting $4000 extra pays it off 5 months earlier. I know the smart thing is to pay off all debts, but I really want to have more than $1000 saved for emergencies. What would you do?  

Answer 1

Pay it off get it out the way

Answer 2

I would save it for your emergency fund. Especially if you are wanting more to help you feel secure. We have some debts and could be putting the extra towards the debt but we are working in $5000 for emergencies. When we reach that then I’ll apply all extra to debt.  

Answer 3

I think if your jobs are secure and you're not worried about losing them I would totally pay the Jeep off because then you would be going on to baby step 3 and building up that emergency fund.  

Comments

@sporran40 My main income is through being self employed and my business is closed right now. I do work part time at the grocery store but it is more to supplement the uncertainty of being self employed. My husbands job is extremely secure though.  

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@and0 are you comfortable with just his income? Maybe go halfsies, 2k to the Jeep. $2k to savings.  

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@hellbox395 His income is definitely the majority of our income, especially since I started my business, but I got my part time job because it was difficult at times when I had no income coming in myself

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@and0 I think it really depends on how much this payment is a month. If you're paying 500 or more on this Jeep then it would probably be beneficial to pay it off. Then I would take whatever the monthly payment is of the Jeep and I would put that into my savings account every month

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@sporran40 we pay $303. 65 bi-weekly but just upped it to $453. 65 bi-weekly which will pay it off 2 years and 4 months early. Putting the $4000 on will save another 5 months but still won’t be paid until 2023

Answer 4

I’d save it now too. Security during this uncertainty.  

Answer 5

If you aren’t comfortable with a $1000 emergency fund, save the $4000.  

Answer 6

For the time being we upped our EF to $5000. If in the future we decide we are ok with less we can always turn around and send some to debt.  

Comments

@hauteur good point!  

Answer 7

If jobs are secure, save $1000 emergency fund then apply the rest to debt. Though I’m confused how a $4000 payment towards principal will only pay off your loan 5 months early?  

Comments

@noctule86795 my husbands job is secure. I am self employed and my business is closed right now. I work part time at the grocery store but it doesn’t pay very much. I used an online lump sum calculator to see how it would help and that’s what it said.  

Answer 8

I currently have a Kia and my car payment is 290 I wanted to get a Jeep if you don’t mind me asking what your payment is? I would put half towards extra emergency and half to your cars and then pay extra

Comments

@mesdemoiselles9 I have a 4-door Jeep Wrangler JLU paying $303. 65 bi-weekly on an 8 year loan  

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I like Brittany's suggestion. Half savings and half car payment. You kill two birds with one stone in a sense.  

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With a car payment that high i would high recommend paying it off and taking that money you normally pay and put it it savings.  

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13 payments × 303. 65= 3947. 45 so in about 3 and halfs months you will have ur money back up.  

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@sporran40 it will be nice when we can keep that money, but even putting the extra it still won’t be paid off until the end of 2023. That’s why I’m not sure if it’s better right now to have extra saved in an emergency fund with the state of the world right now

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@and0 I'm sorry I must have thought you meant 4000 would pay it off I would save it then in my opinion

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@sporran40 I wish!  

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@and0 I completely understand I have about 16, 000 left on mine too

Answer 9

Save it for now.  

Answer 10

Why couldn't you meet in the middle? Put 2000 toward the jeep and 2000 toward the emergency fund?  

Answer 11

Save some (whatever amount makes you feel comfortable) & apply the rest to your Jeep.  

Answer 12

Save. No job is secure now.