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All,
In a nutshell, here's our situation: we got married about a year ago, we both had saved some money (enough to do 20% down on a home), and we still have roughly $40,000 in the bank.
Next year I'll get a pretty good raise. Not enough to compensate if the wife quits working, but it's a good raise percentage-wise.
We're in a good position, but I was hoping from some more seasoned folks some advise on how best to proceed.
I've set aside $18,000 as an emergency fund we don't touch. I also have some smaller savings areas (IE, tile floors, etc) we save towards also.
I have $16,000 in a "New Car" fund.
We currently drive a 2013 nice car, interest is about 1%, payments are low ($240), so it's not killing us. There's $9,700 left on it.
The other car is old (2002) high mileage, we obviously owe nothing on it. It's probably worth $3,000.
The dilemma I'm in is this:
1) We both work now, no kid on the immediate horizon (When we have one, she won't work)
2) One of our cars is old, while it has been reliable it's still old
3) Occasionally, we need a truck. It's a pain to borrow one sometimes. Problem with trucks is they're $20k for a decent used one that's not high mileage or very old (2010ish model with 70k miles).
I do not want two car payments under any circumstances knowing a kid will come someday in the next couple of years. One is enough- and I'd really like to get down to NONE.
Would you:
1) Leave it all alone
2) Pay off 2013 car, and put that payment in the "New Car" fund until the 2002 car actually dies
3) Pay off 2013 car, sell the 2002 car for what we can get ($3,000), and buy a truck with that money? ($20,000)
Trucks aren't the best on gas mileage.
There's nothing inherently wrong with the old car.
Common sense tells me to not buy one until we need one.
However, we are both working right now and in a much better position to get a newer vehicle that'll last us another 8 years. The old car (2002) in 8 years, it may still run, but it'll probably be a hunk of junk by then, too.
Would it be smarter to get it done now (pre-child) or only when forced to?
In a nutshell, here's our situation: we got married about a year ago, we both had saved some money (enough to do 20% down on a home), and we still have roughly $40,000 in the bank.
Next year I'll get a pretty good raise. Not enough to compensate if the wife quits working, but it's a good raise percentage-wise.
We're in a good position, but I was hoping from some more seasoned folks some advise on how best to proceed.
I've set aside $18,000 as an emergency fund we don't touch. I also have some smaller savings areas (IE, tile floors, etc) we save towards also.
I have $16,000 in a "New Car" fund.
We currently drive a 2013 nice car, interest is about 1%, payments are low ($240), so it's not killing us. There's $9,700 left on it.
The other car is old (2002) high mileage, we obviously owe nothing on it. It's probably worth $3,000.
The dilemma I'm in is this:
1) We both work now, no kid on the immediate horizon (When we have one, she won't work)
2) One of our cars is old, while it has been reliable it's still old
3) Occasionally, we need a truck. It's a pain to borrow one sometimes. Problem with trucks is they're $20k for a decent used one that's not high mileage or very old (2010ish model with 70k miles).
I do not want two car payments under any circumstances knowing a kid will come someday in the next couple of years. One is enough- and I'd really like to get down to NONE.
Would you:
1) Leave it all alone
2) Pay off 2013 car, and put that payment in the "New Car" fund until the 2002 car actually dies
3) Pay off 2013 car, sell the 2002 car for what we can get ($3,000), and buy a truck with that money? ($20,000)
Trucks aren't the best on gas mileage.
There's nothing inherently wrong with the old car.
Common sense tells me to not buy one until we need one.
However, we are both working right now and in a much better position to get a newer vehicle that'll last us another 8 years. The old car (2002) in 8 years, it may still run, but it'll probably be a hunk of junk by then, too.
Would it be smarter to get it done now (pre-child) or only when forced to?
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