10K to "spend"

[robex]

My vote is for paying off the car. Use the money you've been paying on that loan and add it to the HELOC.

...or, better yet, sell the new car, buy something second hand (with cash) and alleviate the car loan that way. Then, you'll still have $10k to apply to the HELOC.

[cschin4]

Everybody says "sell the car". Who actually does that in reality?

[collegeguy]

well, i guess i see what you're saying as far as once you pay off the car then you might itch to get a new one. personally, in the last 6 years, i've only had 1 year of a car payment and that's with this new car (now 1.5 yrs old), and if i pay it off, i'm going to have it for the next 7-9 years. its a honda pilot and not to get into a discussion about cars, but for my $ a honda is about as good a car out there and fits the bill.

that said, i'm like disneysteve...i hate having debt.

i understand about compounding interest and all that, but i think paying off the car or throwing it all at the heloc either helps my cashflow situation now by eliminating the car payment, or gets rid of the heloc in about 2.5 yrs vs. 4 or 4.5. and if that's my primary goal, which i think it is, then its one of those two. a main reason why i say that (again, I do realize the value and importance of compounding interest) is because i feel pretty good about my current nest egg, and maxing out my 401K and a Roth for both myself and my wife each year. So, trying to balance the two - investing enough for the future and having a comfortable cashflow for today. Certainly not easy to do, but trying.

[disneysteve]

Originally Posted by cschin4

Everybody says "sell the car". Who actually does that in reality?

Almost nobody. I agree that it is pointless advice.

[robex]

I guess it depends how much you 'hate' having debt.

Dh and I don't do debt and the only thing we've not paid for completely in cash is our mortgage. We each work part time and spend the rest of the time with eachother and our 3 kids.

All a matter of priorities and opinion, I guess.

[Scanner]

I don't want to argue too much with the regulars here in front of a guy we are supposed to be giving advice but what about my contention that he's not going to be able to invest once the second baby gets here? (or at the very least it's going to be very difficult with the loss of the wife's income)

What happened to paying yourself first?

Is it just because he wants the cash flow improvement everyone is steering clear of investing it?

[disneysteve]

Originally Posted by Scanner

I don't want to argue too much with the regulars here in front of a guy we are supposed to be giving advice but what about my contention that he's not going to be able to invest once the second baby gets here? (or at the very least it's going to be very difficult with the loss of the wife's income)

What happened to paying yourself first?

Is it just because he wants the cash flow improvement everyone is steering clear of investing it?

No argument here. I think investing is a great idea and I don't doubt that he can outperform the 5.5% car loan rate, but he did mention cashflow being an issue. That's why I voted for using the 10K for debt repayment.

[collegeguy]

yeah, cashflow is an issue. thing is i already contribute 15% to my 401K and my wife and I plan to continute contributing the max to our Roths. So, I think I'm already doing the right things in that respect. I agree that I can probably outperform the car loan rate, but its a cashflow thing and will allow me greater flexibility.