I recently bought a new car because my old one was unreliable and needed constant repairs. This is my first car payment in over three years, and I need advice on whether I should focus on paying off the car loan early or continue building my savings.
Here’s my financial situation:
- Household income: $210,000 a year
- New car payment: $650 a month at 6.59% interest
- Debt: Very little, just a mortgage and a credit card that I pay off monthly
- Monthly expenses: Normal bills with no excessive spending
Monthly Contributions and Savings:
- Brokerage account: $2,000 a month, current total of $450,000
- 401(k): Maxed out yearly
- College fund: $1,000 a month
- HYSA Emergency Fund: $55,000 saved, contributing $500 a month, earning $178 in interest monthly
- HYSA Fun Savings: $20,000 saved, contributing $1,500 a month, earning $47 in interest monthly
Given this, should I:
- Pay more towards the car loan to pay it off early, possibly reducing my monthly savings contributions?
- Stick to the minimum car payment and continue contributing the same amount to my savings and investments?