What to do with 10G

[IrishMa]

I have a 401k, I have a emergency fund, and a vacation savings account. I am trying to decide what to do with 10G...either put in in savings, put it towards my house (6%) (and planning on moving in 2 years), pay off my car (owe 5000, 3%)or pay towards my Jeep (owe 25,000 3%). Any advice would help, thanks.

[krantcents]

I have a 401k, I have a emergency fund, and a vacation savings account. I am trying to decide what to do with 10G...either put in in savings, put it towards my house (6%) (and planning on moving in 2 years), pay off my car (owe 5000, 3%)or pay towards my Jeep (owe 25,000 3%). Any advice would help, thanks.

The way I determine what to do with excess cash is look at the alternative investment choice. First, do you need the money in the next 5 years? Can you get a better return than the percent the loans cost? Also, have you considered a Roth IRA? I hope this helps!

[greenskeeper]

how did you get car loans at 3%?

[buildmybudget]

Like Krant said, do you have a Roth IRA? You should hopefully be able to achieve a higher ROR on your money in a ROTH than you would save by paying down either car loan, so I would invest it.

[TBH]

I'd pay off the smaller car loan because that will eliminate a payment that you can put toward the bigger loan.

Then I'd probably invest the rest.

Half debt paydown, half investment. Sounds about right.

[littleroc02us]

Pay the car off and then apply the other 5k to the mortgage. Better to gain more equity in the home if your selling...

[jpg7n16]

I have a 401k, I have a emergency fund, and a vacation savings account. I am trying to decide what to do with 10G...either put in in savings, put it towards my house (6%) (and planning on moving in 2 years), pay off my car (owe 5000, 3%)or pay towards my Jeep (owe 25,000 3%). Any advice would help, thanks.

Before you can decide what to do with the $10k, you should first decide what your goal is. Is your goal:

1. increase monthly cashflow?
2. increase overall net worth?
3. reduce interest costs?
4. quickly get out of debt?
5. maximize investments?
6. a better nest egg for retirement?
7. lower taxes?
8. help others out?

Each one of those goals can have a different outcome. Because you should: (if 1 then 1, if 2 then 2, if 5 then 5, etc.)

1. pay off the small car
2. invest the money/pay down mortgage (depends on your risk tolerance)
3. pay down the mortgage
4. pay down the mortgage
5. invest the money
6. fund IRA (Roth or Traditional depending on your tax situation)
7. fund a tax-deductible IRA (and 1 for spouse if applicable)
8. give some of it away

You'll keep getting different answers until you're clear about what you want to accomplish. Because not everyone here is trying to accomplish the same thing. Some are trying to free up cashflow, others are trying to maximize net worth, and others are looking for a compromise to two options (1/2 invest and 1/2 to debt).

So ask yourself, "what am I hoping to accomplish with this money?"

[bjl584]

Your options are almost unlimited. It's a good problem to have though. I would suggest looking at your overall financial picture and short and long term plans, then decide the best use of the money. Perhaps paying down extra debt makes sense. Perhaps investing the money makes sense. It just depends where you are in life and what you want to accomplish.

[cjscully]

I'd pay off the smaller car loan because that will eliminate a payment that you can put toward the bigger loan.

Then I'd probably invest the rest.

Half debt paydown, half investment. Sounds about right.

That's probably the direction I'd lean as well.