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$$$Extra car payment or savings?

Posted by on Jun. 2, 2014 at 2:51 PM
  • 12 Replies

This is the first time I have had a car payment (or any debt at all) in many years. As of now we owe $9500 on our car (put $6000 was $15500). Well since we cleared out some of our savings for down we have $5500 leftover in savings which is 3 months living if something was to go wrong. I only have 4% interest on the car so about $27 mo/interest. My question is, is when we get extra moeny should it go toward car since it builds interest or savings to build a 6 month cushion? BTW we have about $800 a month to go to either. WWyd and why?

by on Jun. 2, 2014 at 2:51 PM
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Replies (1-10):
TS9509
by Bronze Member on Jun. 2, 2014 at 2:55 PM
If you make the "extra payment" write a seperate check and put in the memo apply to principal.
Indy3000
by Bronze Member on Jun. 2, 2014 at 2:57 PM

Thanks for the info :)

Quoting TS9509: If you make the "extra payment" write a seperate check and put in the memo apply to principal.


TS9509
by Bronze Member on Jun. 2, 2014 at 3:04 PM
Your welcome

Quoting Indy3000:

Thanks for the info :)

Quoting TS9509: If you make the "extra payment" write a seperate check and put in the memo apply to principal.

Indy3000
by Bronze Member on Jun. 2, 2014 at 4:05 PM

bump

MommaLaynie
by New Member on Jun. 2, 2014 at 5:01 PM
I would split it down the middle, half to the car, half into savings. That way, both are being taken care of.
k9l1c5
by Ruby Member on Jun. 2, 2014 at 5:11 PM

I would build the savings back up first and THEN put extra towards the car after you get it back up to where you want it to be. And agree, make sure they apply any extra to the principal, because otherwise they automatically apply it to the interest... which gets you nowhere.

Indy3000
by Bronze Member on Jun. 2, 2014 at 5:12 PM

Ya you would think it would automatically be applied to principle but then i suppose the banks want to make more money right...

Quoting k9l1c5:

I would build the savings back up first and THEN put extra towards the car after you get it back up to where you want it to be. And agree, make sure they apply any extra to the principal, because otherwise they automatically apply it to the interest... which gets you nowhere.


MamaBear2cubs
by Nikki on Jun. 3, 2014 at 9:19 AM
1 mom liked this

This is what I would do as well.

Quoting MommaLaynie: I would split it down the middle, half to the car, half into savings. That way, both are being taken care of.


chariot71226
by on Jun. 3, 2014 at 10:31 AM

Why not do both?  $400 to each.  3 months of living expenses is good but a 6 month cushion is better.

Indy3000
by Bronze Member on Jun. 3, 2014 at 10:34 AM

That is what i am going to be doing i think....

Quoting chariot71226:

Why not do both?  $400 to each.  3 months of living expenses is good but a 6 month cushion is better.


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