savings

cheshirecat · #1 (**permalink**) 03-15-2008, 03:00 PM

we have $3000 in savings. i'm wondering if we should maybe use it to pay down one of our debts. and if so where do we apply it

these are our debts.

-$11,000 CC at 0%interest for next 10 months with large possibility of keeping it 0%until paid off
-$8,000 car loan at 6.24%
-$18,000 car loan at 6.99%

would appreciate suggestions

disneysteve · #2 (**permalink**) 03-15-2008, 03:47 PM

We need more info to be able to answer that question. When you say $3,000 in savings, what does that mean? Is that your emergency fund or in addition to an EF? Are you contributing to a 401K or other retirement plan? Do you have any other assets? If you give us a better breakdown of income, expenses and savings, we could give a better answer.

cheshirecat · #3 (**permalink**) 03-15-2008, 05:14 PM

i'm a teacher at 27 years planning to teach up to 10 more. so i have my school retirement and am paying 400 a month to a 401. my husband also has work matched retirement that he contributes to. the 3000 would be our emergency fund i guess as we have no other money saved.

so our choices are

keep it in savings.

pay on the 8000 dollar loan because that will pay it off sooner and free up the $380 payment to go on one of the other loans

pay on the 18,000 because that is the hight amount

or the 11.000 but it has no interest so i dont think that would be a good choice

zakity · #4 (**permalink**) 03-15-2008, 06:44 PM

Leave the $3000 in the savings then. If something happens, you need the EF.

Merch · #5 (**permalink**) 03-15-2008, 08:03 PM

What zakity said. You need 3-6 months of expenses saved.

jIM_Ohio · #6 (**permalink**) 03-15-2008, 08:38 PM

How much are you paying on each debt now, and when is projected payoff of each debt? Are you in a cash flow crunch?

If you are not in a cash flow crunch, then do nothing (keep 3k in savings). To free up cash flow:

I would send the $3k to the $8k car loan and try to free up that payment, then apply that payment to 18k car loan or cc at 0%.

If the 0% cc is going to be paid off before rate increases, then pay down the car at 8k, then pay down the other car at 18k.

cheshirecat · #7 (**permalink**) 03-16-2008, 05:23 AM

pulled

CreditExpert · #8 (**permalink**) 04-16-2008, 04:10 AM

its a good idea to leave the money as a EF, but if you really want to reduce debts it will be the best to pay off the highest interest debt first

Tree0164 · #9 (**permalink**) 05-08-2008, 06:32 AM

I would leave $1k in the emergency fund and then use the remaining and put that towards the credit card debt.

Then be aggressive in paying off the credit card debt so it is paid off in 10 months.

I also suggest reading Dave Ramseys book Total Money Makeover