I've been thinking about paying my car off early. I've been paying a little extra (anywhere from $30-$300) for the past few months but, now that I'm trying to beef up my retirement saving, I'm starting to reconsider.
I know that it's a better idea to just save for retirement instead of paying my car early but it would be so nice to not have a car payment for the first time in my grown up life. Besides, I'm able to pay extra right now, who knows what kind of financial straight I'll be a few years from now? What if something happens to me, like a huge medical bill or something, that wipes out my savings and I end up losing my car 'cause I can't make the payments? What if I end up with another financial burden and the comfortable payment that I have now becomes unbearable then? Who knows?!
This post on All Financial Matters reminded me of my situation- mainly 'cause it's the same car and roughly the same time period. His stats:
Interest Rate: 7.3645%
Period Rate: 0.6137%
Loan Term (Years): 3
Payments per Year: 12
Total Number of Payments: 36
Amount Financed: $15,019
Payment Amount: $466.26
Interest Rate: 6%
Period Rate: (not sure what that means)
Loan Term (Years): 5 years
Payments per Year: 12
Total Number of Payments: 30 left
Amount Financed: Payoff amount is $7,247.46.
Payment Amount: $270.90
Since my payment is already half over, I guess there isn't really that much benefit to paying it off early. I mean, I did the math, if I were to pay it off right now I would save like $900, which is a lot of money but not enough to make me want to use a good chunk of my emergency fund to do so (anyway, this isn't an emergency). And, don't get me wrong, it would be pretty sweet to have an extra $270.90 a month but, even though I've gotten a lot better with money, I don't think all $270.90 of that would make it back to my emergency fund.
It's probably not even worth tacking on an extra $50 a month... better to stick it in a Roth or something (as soon as I open it... or maybe I should just up my contribution to 15% at work? Maybe stay 10% 401(k) but also add 10% 401(roth)? Is that even an option? I should look into that).
Augh! I really want this debt gone though!